US government crypto wallet stolen: $20 million missing.

US government crypto wallet lost $20 million in assets in cyberattack.

On October 24, a crypto wallet that was likely controlled by the US government was compromised. The wallet contained funds from the 2016 Bitfinex hack, and the attackers withdrew $20 million from the wallet. According to onchain analytics firm Arkham Intelligence, the attacker’s wallet currently holds approximately $13 million worth of assets.

Arkham Intelligence said the attacker sent the funds to an address starting with “0x348.” These assets included USD Coin (USDC), Tether (USDT), aUSDC, and Ether (ETH). The attacker converted the compromised stablecoins into ETH and began laundering the funds through addresses believed to be associated with money laundering services.

The attacker was reported to have targeted funds seized by the US government in the 2016 Bitfinex attack. The perpetrators of this hack, Ilya Lichtenstein and his wife Heather Morgan, will appear in court in November 2023.

Lichtenstein hacked the Bitfinex exchange in 2016 and stole 120,000 Bitcoins. These Bitcoins are said to be worth approximately $8.2 billion in today's values. The couple were arrested by US authorities in 2022.

The US Department of Justice made the largest seizure of digital assets to date during this operation. The couple pleaded guilty to money laundering and conspiracy to defraud the US government in July 2023 in a deal with prosecutors. This deal allowed them to receive a reduced sentence.

In a filing on October 9, prosecutors recommended that Heather Morgan be tried for 18 months in prison for her cooperation. Morgan was a lower-level participant in the scheme and did not use the bulk of the stolen funds. In the same case, prosecutors recommended a five-year sentence for Lichtenstein, significantly less than the 20-year sentence prosecutors had initially sought.

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