US government wallet stripped of $20 million in seized assets in suspected hack

More than $20 million worth of seized stablecoins and… Ethereum was transferred from a wallet connected to the US government, which is considered theft.

On-chain analytics firm Arkham Intelligence revealed that the attacker sent funds related to the 2016 Bitfinex hack to a five-day-old wallet address.

“$20 million in USDC, USDT, aUSDC and ETH were suspiciously moved from a USG-linked address,” the report said on October 24. after on X.

Hacker starts laundering government funds through various platforms

Shortly after the transfer from the government wallet, the hacker began converting the stablecoins into ETH via addresses likely linked to a money laundering service, according to Arkham Intelligence.

funds go instant exchanges looks nefarious

— ZachXBT (@zachxbt) October 24, 2024

On-chain sleuth ZachXBT said some of the funds have also been moved to direct exchanges. One of these platforms gets its liquidity from Binance, the leading centralized crypto exchange.

The US government has seized assets from a 2016 Bitfinex hack

The money involved in these transfers was seized by the US government during the 2016 Bitfinex hack. Ilya Lichtenstein and Heather Morgan, the perpetrators of the hack, will be sentenced next month.

During the 2016 hack, Lichtenstein stole 120,000 Bitcoin. A few years later, in 2016, the couple was arrested by US authorities. Law enforcement officers then seized the stolen assets, which consisted of USD Coin (USDC), Tether (USDT), aUSDC, and Ethereum (ETH).

The couple pleaded guilty to money charges money laundering and conspiracy to defraud the U.S. government in 2023. This was part of a plea deal with prosecutors for a lighter sentence.

In an Oct. 9 filing, prosecutors argued that Morgan’s cooperation with law enforcement warranted a lighter sentence of 18 months in prison. She was also considered a “lower level” participant in the Bitfinex hack and also did not spend a substantial amount of the stolen money.

Prosecutors used the same reasoning to recommend Lichtenstein receive a five-year prison sentence for orchestrating the hack. His cooperation with investigators and lack of a criminal history were also cited as reasons for a reduced sentence. Prosecutors had initially sought a 20-year prison sentence.

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