American intelligence agencies have posted a lookout notice for American hacker Nopaoh. This lookout is connected to the 2016 Bitfinex hacking incident that took the cryptocurrency trade by storm.
Nopaoh is connected with the hack for allegedly conspiring to launder the cryptocurrency stolen from Bitfinex in 2016.
In a tweet from the handle @NSAMostWanted, the lookout notice reads, “Help #FBI & #NSA locate American hacker “Nopaoh” former Lizard Squad & Sec Division Member; wanted for alleged conspiracy to launder cryptocurrency that was stolen during the 2016 hack of Bitfinex, a virtual currency exchange, presently valued at approximately $4.5 billion.
Who is Nopaoh
Nopaoh is an ex-member of Lizard Squad and Sec Division. The FBI is seeking a criminal charge against the hacker for conspiring to launder money that originated from Bitfinex’s virtual currency exchange hack in 2016. Currently, it has a market cap of about $4.5 billion.
About Lizard Squad
One of the well-known hacker groups, dubbed Lizard Squad, has been linked to some of the most noteworthy hacks and cyber-attacks on some of the world’s largest online games. Zachary Buchta started the group on August 18, 2014. Lizard squad, which was active roughly at those times.
The organization attacked video games service providers, including PlayStation Network and Xbox, bringing out the system networks of both companies. The team would at times cause disturbance during streaming of players’ games, interfere with gaming competitions, and storm game development studios.
Lizard Squad has become famous for announcing DDOS hits. Cybercrime causes flooding of a server with internet traffic to deny service access for users connecting to relevant online services and sites.
The 2016 Bitfinex Hack
In August 2016, the Bitfinex c exchange was hacked. This led to the theft of 119,756 bitcoin which were approximately US$ 72 million in value then.
Then in February 2022, the U.S. government managed to recover and seize a portion of the BTCs, estimated at $3.6Bn, through the decryption of a file belonging to an individual named Ilya Lichtenstein who held files.
Lichtenstein was indicted together with his wife Heather Morgan on charges of conspiring to launder the Bitcoin proceeds from the theft. Lichtenstein confessed in August 2023 that he had indeed stolen the paintings.
The Breach
Security breach occurred at the Bitfinex exchange which is located in Hong Kong in August 2016. About two thousand approved transactions were sent to one wallet originating from user’s segregated wallets. As soon as that heist was over, a fall in the currency’s trading price resulted in US$58 million worth of stolen bitcoin.
Following the discovery of the breach, Bitfinex suspended all Bitcoins withdrawal as well as all exchange activities. They also trailed the hackers so as to discover them at large. Even their exchange clientele, although all their accounts were intact, they received compensation for the loss of 36% and were issued with BFX tokens in similar proportions.
Subsequently, its ability to utilize the US dollars payment and withdrawal system was hindered. Surprisingly, the hack occurred while Bitfinex was employing Bitgo, a multi-signature security service provider.
In July 2023, bitfince cooperated with the Department of Homeland Security for retrieving more than $315 thousand of the cash and cyrptocurrency illegally withdrawn during the 2016 intrusion.
These funds will then go back to those people who were holding of Bitfinex’s recovery right tokens, and these are those people who lost money as a result of the attack.
Money Laundering
The money started flowing out from this single wallet around the beginning of 2017, mainly through a marketplace called AlphaBay to try and clean them.
The funds were redirected into Russia’s Hydra market in the aftermath of the worldwide action carried out jointly by the FBI and its partners. Shutting down of AlphaBay could have allowed the authorities to get into their internal transaction records and put things together.
A couple in New York, Ilya Lichtenstein (and his wife Heather R. Morgan, have been accused of planning to wash bitcoin worth $3.6 in February 2022. Additionally, each of the pair may receive a life sentence of 20 years for conspiracy to launder money and 5 years each for conspiracy against the Unites States respectively. No charge was brought against either for actually hacking.
Law enforcement was able to secure a search warrant for the cloud storage they knew Lichtenstein used, which enabled them to obtain a spreadsheet that contained all the relevant wallet addresses and passwords. One of wallets contained approximately 94,000 Bitcoin coins.
Law enforcement could follow the money through the open and transparent nature of the blockchain while retrieving the passwords made it possible for them to get their hands on the cash.
A small portion of these funds was transferred into more conventional finance channels and applied on gold, Ethereum blockchain-based tokenized assets (NFTs) and a Walmart gift card that paid for Uber rides and a gaming console.
Converted into fiat currency worth several hundred million dollars, only 20% of the Bitcoin disappeared from the original wallet where it all took place. In August 2023, they have pleaded guilty.
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