Key Points
- Hackers reportedly stole $20 million from a U.S. government-linked crypto wallet containing seized funds.
- The stolen funds were quickly converted to Ethereum (ETH) and routed through multiple addresses marked as “Binance Deposit”.
Hackers have reportedly infiltrated a crypto wallet linked to the U.S. government, stealing approximately $20 million in various digital assets. The wallet held seized Bitfinex funds.
The stolen assets included Tether [USDT], USD Coin [USDC], and Ethereum (ETH). This information comes from blockchain intelligence firm Arkham.
Details of the Hack
According to Arkham, the stolen stablecoins were quickly converted to ETH. They were then routed through multiple addresses marked as “Binance Deposit”. The firm also indicated that the laundering process had already begun through suspicious addresses linked to a money laundering service.
Interestingly, the crypto community responded with humor upon hearing the news. Arkham also noted that the U.S. government had withdrawn $5.4 million from Aave shortly before the hack. This marked the first activity on this address in 8 months.
The Bitfinex Hack
In 2016, Ilya Lichtenstein and Heather Morgan orchestrated a high-profile hack on the Bitfinex exchange. This hack resulted in the seizure of 120,000 Bitcoin (BTC), now valued at approximately $8.2 billion.
U.S. authorities arrested them in 2022, leading to the largest-ever digital asset recovery by the Department of Justice. After striking a plea deal in July 2023, both admitted to charges of money laundering and conspiracy against the U.S. government.
Prosecutors have sought an 18-month prison term for Morgan, primarily due to her lesser role in the scheme and cooperation with law enforcement. Lichtenstein, who initially faced 20 years, is expected to receive a five-year sentence.
Blockchain investigator ZachXBT responded to Arkham’s report, describing the hack as “nefarious” and labeling it a clear case of theft. He observed that the hackers moved Ethereum in $40,000 increments to what appeared to be a deposit address linked to Binance. However, he later clarified that these transactions were routed through a “nested exchange” which uses Binance’s liquidity.
This nuanced approach shows how complex laundering schemes can obstruct the exact path of stolen funds in the crypto space.
