The Bitcoin Case That Puzzled the Shadowy World of Cryptocurrency – The New York Times

The Bitcoin Case That Puzzled the Shadowy World of Cryptocurrency – The New York Times

Good morning. It’s Monday. We’ll look at the Bitcoin case that confounded the internet. We’ll also find out how many trees New York City’s five borough presidents want planted in the next eight years.

The information about the cryptocurrency case that broke last week was, well, cryptic.

Were the couple who were arrested Bonnie and Clyde without the guns and the murders? Or were they Elaine May and Mike Nichols, if you’ve seen their routine on YouTube — but with computers instead of pay telephones, switchboards and a lot more money than a dime?

The case began in 2016, when anonymous hackers stole 119,754 Bitcoin from the Hong Kong-based cryptocurrency exchange Bitfinex. It was worth $71 million at the time.

Moving the loot risked revealing the “who” in what appears to be a 21st-century whodunit, because Bitcoin trades can be tracked by anyone who accesses the blockchain, essentially a permanent history of each Bitcoin. Tiny fractions of the stolen Bitcoin disappeared in complex transactions over time, but the bulk of the haul remained in plain sight, if you knew where to look online.

My colleagues Ali Watkins and Benjamin Weiser write that it was as if the getaway car had been parked outside the bank for six years with the windows up, the doors locked and the money inside riding the Bitcoin roller-coaster, up and down but mostly spectacularly up. In the six years that the car sat there, the value of the stolen Bitcoin soared to more than $4 billion.

[Inside the Bitcoin Laundering Case That Confounded the Internet]

The arrests surprised some of the couple’s acquaintances, and the goofy online lives that prosecutors described were at odds with the government’s claim that they were sophisticated criminals with several fake identities and many encrypted devices stashed in their Manhattan apartment — even a bag labeled “burner phone.” The authorities also said they found $40,000 in cash.

But New York magazine called the whole thing “the big dumb Bitcoin-laundering scheme,” and a Twitter account that comments on cutting-edge financial markets declared: “OK. THE HACKERS ARE NOT CIA. THEY ARE IDIOTS.”

Could they really be at the center of one of cryptocurrency’s enduring mysteries?

Officials have not said whether they believe Lichtenstein, 34, and Morgan, 31, were directly involved in the Bitfinex breach. A Justice Department official declined to comment on that point last week, but officials said the couple had used various techniques to try to launder the stolen Bitcoin.

The charges against them cover only siphoning off chunks of the stolen currency — about 25,000 Bitcoin — and hiding them in different digital wallets they controlled. Law enforcement officials said they found 94,636 Bitcoin, valued at more than $3.6 billion, in a wallet belonging to Lichtenstein.

Officials said the couple had accounts in Russia and Ukraine and appeared to have been working on a plan to live in one of those countries before the pandemic. Lichtenstein, known as “Dutch,” has dual citizenship in the United States and Russia.

Anirudh Bansal, the couple’s lawyer, declined a request for comment. But in court papers, he has made it clear that he believes the government’s case was built on “unsupported, conclusory leaps.”

Still, there seemed no question that Morgan and Lichtenstein had lived flamboyant lives in New York. She rapped under the name Razzlekhan — the self-styled “crocodile of Wall Street” — in YouTube videos like “Versace Bedouin,” filmed, naturally, on Wall Street. Lichtenstein said in a 2019 Facebook post that he had proposed marriage to her in a “weird, creative multichannel marketing campaign” that included renting a billboard in Times Square.

She also contributed articles to Inc. and Forbes, where she explored how to “protect your business” as “cybercriminals and fraudsters are taking advantage of disruptions caused by the pandemic.” And on Twitter in December, she said the crypto currency market might be overinflated.

“The amount of spam I’m getting about sketchy crypto get rich stuff really makes me feel like this bubble is gonna pop soon!” she wrote.


Weather

It’s a mostly sunny day near the high 20s, with temps dropping below the 20s at night.

alternate-side parking

In effect until Feb. 21 (Washington’s Birthday).


Later today the city’s five borough presidents will ask Mayor Eric Adams to commit to planting a million new trees by 2030.

The borough presidents are not suggesting that he do the digging and planting himself — the Parks Department can handle that. They want to revive the Million Trees NYC initiative that started a decade ago, when Michael Bloomberg was mayor. Mark Levine, the Manhattan borough president, proposed planting the next million trees at an estimated cost of slightly more than $500 million.

My colleague Dana Rubinstein writes that the borough presidents will also ask Adams to honor a campaign pledge to spend 1 percent of the city’s budget on the Department of Parks and Recreation, which they consider chronically underfunded.

New York now has roughly seven million trees, less than one tree for each of its 8.8 million residents, according to a recent Nature Conservancy report. And with Adams making healthy living a major component of his agenda, Donovan Richards Jr., the Queens borough president, said the tree initiative was a natural policy fit for the mayor.

“This ties into everything he’s talking about,” Richards said. “Having a healthy eating lifestyle is great, but having a healthy open space is just as good.”

Kate Smart, a spokeswoman for Adams, was noncommittal. She said the administration wanted to explore “innovative ways to invest in quality green spaces for all New Yorkers.” Earlier this month Adams described his 1 percent parks budget promise as one of several “long-term goals.”



The van pulled up on Friday — appropriately, the day before Abraham Lincoln’s birthday. It was soon loaded with boxes of material about him: notes, newspaper clippings, lecture scripts and correspondence with Lincoln experts.

The material had been saved by Harold Holzer, himself a Lincoln expert who has written or edited more than 50 books about the 16th president, not counting the sixth-grade book report that started it all. The van took Holzer’s papers to the New York State Library in Albany, which acquired them in something of a homecoming. Holzer said he had done research there since the 1970s while also working in state government and, later, for the Metropolitan Museum of Art. He is now the director of the Roosevelt House Public Policy Institute at Hunter College.

Lincoln has been represented in the library’s holdings since it acquired Lincoln’s handwritten draft of the preliminary Emancipation Proclamation in 1865. “He issued that proclamation in September 1862 saying, ‘OK, you rebellious states, if you’re not back in the union on Jan. 1, I am confiscating your property,’” Holzer said. “And on Jan. 1, he signed a new document saying, ‘I told you I would do this, now here’s the deal’” — the Emancipation Proclamation itself.

Some of the papers the library acquired from Holzer were the raw material for his book “Lincoln: How Abraham Lincoln Ended Slavery in America” (2012), the young-adult companion book for Steven Spielberg’s “Lincoln.” He said he and his wife, Edith, were considering selling the place where the papers had been, their house in Rye, N.Y.

“It’s hard to present a house when it’s got 50 boxes and that’s the main decorating element,” he said.



Dear Diary:

It was a beautiful spring day in April 1971 and “cut day” at my New Jersey high school. It was my senior year, and four of my girlfriends and I decided to travel into New York City to do some shopping. It was only a 50-minute drive, and we couldn’t wait to get to Bloomingdale’s.

When we got to the store, we immediately hopped onto an escalator up to the juniors department on the second floor.

Halfway up, we heard a familiar voice and saw the mother of one of my friends descending on the down escalator. She waved at us and smiled.

“Oh, hello, girls,” she shouted, “we will talk tonight.”

— Jane Frank

Illustrated by Agnes Lee. Send submissions here and read more Metropolitan Diary here.


Glad we could get together here. See you tomorrow. — J.B.

P.S. Here’s today’s Mini Crossword and Spelling Bee. You can find all our puzzles here.

Melissa Guerrero, Olivia Parker and Ed Shanahan contributed to New York Today. You can reach the team at [email protected]

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Source: https://www.nytimes.com/2022/02/14/nyregion/the-bitcoin-case-that-puzzled-the-shadowy-world-of-cryptocurrency.html