The main suspect in the $4.5 billion cryptocurrency asset theft case becomes a Money Laundering trial witness

In 2022, Ilya Lichtenstein and Heather Morgan were arrested for allegedly laundering $4.5 billion in stolen cryptocurrency. The couple pleaded guilty to the charges last year.

Latest reports indicate that Liechtenstein is currently appearing as a government cooperating witness in a money laundering trial related to cryptocurrency mixing services. The ins and outs of this case are worth exploring in depth.

Event Timeline

• 2016: The Liechtenstein couple stole $4.5 billion worth of Bitcoin from a certain exchange.
• April 2021: The FBI arrested Roman Sterlingov, a key operator of a mixing platform.
• 2021: Multiple mixing platforms involved in Money Laundering were shut down, and some platform founders pleaded guilty.
• February 1, 2022: The US government wallet received approximately 94,643.3 Bitcoins.
• February 2022: The Liechtenstein couple was arrested
• August 2023: The two pleaded guilty and were convicted of theft.

The Liechtenstein couple claimed that they were able to access a certain exchange's system for a long time and stole a large amount of funds. They had used mixing services multiple times for Money Laundering, and later turned to other mixers.

From Principal Offender to Witness

In a recent trial, Liechtenstein stated as a witness:

• They used a certain mixed currency service for Money Laundering about 10 times.
• Later turned to using another mixing service that he believed was better.
• Mixing services only account for a small part of their Money Laundering activities.
• Most of the funds are deposited into cryptocurrency trading accounts registered with identity information purchased on the dark web.
• He has never had direct contact with the operator of the mixed currency platform and does not know the other party.

In 2021, the U.S. Department of Justice accused the mixing platform of laundering over 1.2 million Bitcoins, worth about $335 million at the time of the transactions. These funds mainly came from illegal activities on the dark web market.

Liechtenstein, facing a maximum of 20 years in prison, chose to cooperate with the authorities and revealed details of the case. As of February 27, 2024, the trial is still ongoing, and the jury has yet to make a ruling.

It is worth noting that several cryptocurrency mixers have also attracted the attention of regulatory authorities and face sanctions. In October 2020, the Financial Crimes Enforcement Network imposed a civil penalty of $60 million on the operators of a mixing platform for operating an unregistered money service business.

Anti-Money Laundering Recommendations

To strengthen anti-money laundering efforts in response to such incidents, the following measures can be taken:

1. Strictly implement KYC and AML regulations: Require users to undergo comprehensive identity verification to ensure compliance with relevant regulations.

2. Strengthen transaction monitoring: Implement a real-time monitoring system to analyze suspicious transaction activities, including transaction amounts, frequency, sources, and destinations.

3. Establish a reporting mechanism: timely handle suspicious transaction reports and cooperate with regulatory authorities in investigations.

4. Deepen industry cooperation: Maintain close collaboration with security companies, regulatory agencies, and law enforcement to jointly combat Money Laundering activities. Regular communication to timely respond to the ever-changing Money Laundering strategies of criminals.