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Judge Kollar-Kotelly asked the US government to explain its position on forfeiture to the Bitfinex exchange by Feb. 4.
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A federal court has yet to rule on a proposed motion from the US government requesting crypto forfeited from a criminal case involving the 2016 hack on Bitfinex be returned to the exchange.
In a Jan. 28 filing in the US District Court for the Southern District of New York, Judge Colleen Kollar-Kotelly asked US prosecutors to “provide clarification” on issues related to its request to return funds to Bitfinex as part of proceedings against two money launderers.
The US government seized 94,643 Bitcoin (BTC) and smaller amounts of Bitcoin Cash (BCH), Bitcoin Satoshi Vision (BSV) and Bitcoin Gold (BTG) from Ilya Lichtenstein — who also admitted to hacking the exchange — and his wife Heather Morgan, also known by her rapper alias Razzlekhan. The seizure was part of a criminal case against the pair.
According to the judge, ordering Lichtenstein and Morgan to return the funds to Bitfinex “would appear to have the effect of reducing the amount of the forfeiture order,” which other courts have suggested was “improper.” Judge Kollar-Kotelly asked the US government to explain its position by Feb. 4, after which she would decide on forfeiture.
Jan. 28 court filing on proposed Bitfinex restitution. Source: SDNY
In August 2016, hackers stole roughly 119,754 BTC from the Bitfinex exchange, which was one of the largest crypto thefts up to that point. US authorities arrested Lichtenstein and Morgan in 2022 for money laundering connected to the hack and seized the crypto.
Money launderers going to prison
The husband and wife pair pleaded guilty in 2023 and were later sentenced to five years and 18 months in prison, respectively. Morgan was initially scheduled to report to a federal facility on Jan. 24, while Lichtenstein has been in US custody since 2022.
Related: WazirX gets Singapore court approval to repay victims of $235M hack
After her sentencing hearing in November 2024, Morgan returned to actively posting to social media to promote “creative and other endeavors.” She launched a Cameo channel in December, branding herself as “crypto’s favorite felon.”
Though there were many victims of the Bitfinex hack, the exchange may be the only party that qualifies for reimbursement, according to an October 2024 court filing. The US government had asked victims of the 2016 hack to submit impact statements by November.
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This article first appeared at Cointelegraph.com News
