6 Facts About The Alleged Lichtenstein-Bitcoin Scam: A Timeline

The Department of Justice announced the largest financial seizure in its history Tuesday.

In 2016, popular cryptocurrency platform Bitfinex was hacked. Thieves made off with around 119,754 Bitcoin BTC/USD worth about $71 million. Since the hack, the value of the stolen coins has ballooned into the billions. 

The thieves? Forbes contributor Heather Morgan and her husband, Silicon Valley startup founder Ilya Lichtenstein, according to the Justice Department. The two were criminally charged Tuesday. 

Here is the timeline surrounding the attack, and the facts below:

Aug. 2, 2016 - The theft takes place over a period of 3 hours 24 minutes without anyone noticing. The hacker methodically started draining the largest addresses first, moving to smaller ones over time. 

The majority of the stolen funds remained in Wallet 1CGA4s from August 2016 until Jan. 31, 2022, according to the Justice Department. 

Aug. 2, 2016 - About nine hours after the start of the theft, Zane Tackett, then the director of community and product development at Bitfinex, announces on Reddit’s /r/Bitcoin that Bitfinex “discovered a security breach that requires [them] to halt all trading on Bitfinex, as well as halt all digital token deposits to and withdrawals from Bitfinex.” 

January 2017 - a portion of the stolen BTC moved out of Wallet 1CGA4s in a series of small, complex transactions across multiple accounts and platforms. This shuffling, which created a voluminous number of transactions, appeared to be designed to conceal the path of the stolen BTC, making it difficult for law enforcement to trace the funds. 

Jan. 31, 2022 - Law enforcement gained access to Wallet 1CGA4s by decrypting a file saved to Lichtenstein’s cloud storage account, which had been obtained pursuant to a search warrant. The file contained a list of 2,000 virtual currency addresses, along with corresponding private keys.

Feb. 2 2022 -  the government requested, and on Feb. 4, 2022, a court issued a seizure warrant authorizing the seizure of those funds. Those funds remain in the government’s possession.

Feb. 8, 2022 - The Justice Department announced that Morgan and Lichtenstein were arrested and charged for conspiracy to launder stolen cryptocurrency worth an estimated $4.5 billion. They both face up to 20 years in federal prison if convicted.