Bitfinex Hacker Behind 4.5 Billion Dollars Theft Allegedly Employed This Bitcoin Mixer

Crypto News– Ilya Lichtenstein, the Bitfinex hacker, has testified as a government witness in a US case against the crypto mixer Bitcoin Fog. This move comes amidst intensified efforts by US and European Union regulators to combat crypto-related money laundering.

Bitfinex Hacker Behind 4.5 Billion Dollars Theft Allegedly Employed This Bitcoin Mixer

Lichtenstein admitted to utilizing Bitcoin Fog as one of the services to conceal the trail of funds stolen from Bitfinex. However, he described the mixer’s quality as low and mentioned that it was just one aspect of his strategy to obscure the funds. Bitcoin mixers function by consolidating deposits from various addresses and distributing funds from a different address than the deposit one. Lichtenstein acknowledged Bitcoin Fog’s popularity on the darknet but indicated that he found alternative services more effective for his purposes.

In 2023, Lichtenstein pleaded guilty to money laundering charges. Along with his wife Heather Morgan, also known as ‘Razzlekhan,’ they orchestrated one of the largest crypto scams in history. The duo conspired to launder 119,574 BTC (approximately $4.5 billion) stolen from Bitfinex after the exchange’s 2016 hack. They directed the funds to a crypto wallet owned by Lichtenstein, subsequently transferring them across different chains and utilizing coins with built-in anonymity. It now appears that crypto mixers were also utilized to further obfuscate the origin of the funds.

In 2022, the US Treasury Department blacklisted three addresses associated with the Ethereum mixer TornadoCash. Ethereum co-founder Vitalik Buterin defended the use of crypto mixers by legitimate investors, sparking criticism from advocacy groups like Coin Center, who argued against unwarranted censorship.