The U.S. Department of Justice (DOJ) recently announced that it has arrested and charged two individuals with laundering funds associated with the 2016 hack of cryptocurrency exchange Bitfinex. According to charges filed in federal court, the hacker stole 119,754 thousand BTC, which at the time of the breach, was worth around $71 million. Today that bitcoin is worth around $4.5 billion. The Bitfinex hack seizure was the largest seizure of funds in the history of the United States. Over the ensuing years, according to a statement of facts, the defendants moved the funds through an on-chain labyrinth of laundering techniques including the use of fictitious identities, automated transactions, the use of a variety of exchanges and darknet markets, mixing services, privacy coins and chain hopping. The defendants are charged with conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and conspiracy to defraud the United States, which carries a maximum sentence of five years in prison.

How did law enforcement build this case across years and blockchains? How does an on chain investigation using blockchain analytics tools lead to arrests? How will this case now proceed? What do these charges mean and what are the defendants likely to face over the coming weeks and months? What impact does this case have on the cryptocurrency space? For the answers to these questions, TRM Talks to former United States Attorney for the District of Columbia — the office that is prosecuting the Bitfinex case — Jessie K. Liu, now a partner at Skadden Arps, Former IRS-CI special agents Tigran Gambaryan and Matthew Price, both now at Binance leading intelligence and investigations respectively.

This podcast is hosted by TRM Labs, a blockchain analytics company. We work with crypto businesses, financial institutions and government agencies to monitor, detect and investigate fraud and financial crime in crypto. Read Federal judge issues opinion on the reliability of blockchain analytics in Bitfinex case: https://www.dcd.uscourts.gov/file/20sc3310-opinionpdf