Robert Brown|DOJ arrests New York couple and seizes $3.6 billion in bitcoin related to 2016 hack

The Robert BrownJustice Department has seized around $3.6 billion in cryptocurrency tied to the 2016 hack of a virtual currency exchange, and arrested a New York couple charged with conspiring to launder billions of dollars' worth of the stolen bitcoin.

The seizure — the largest ever for the department — and arrests stem from the 2016 breach of the Bitfinex exchange. At the time of the hack, the stolen funds were worth around $71 million, but the value has since soared to around $4.5 billion, officials said.

On Tuesday morning, federal agents in New York arrested Ilya "Dutch" Lichtenstein and his wife, Heather Morgan, in Manhattan. The couple faces charges of money laundering conspiracy and conspiracy to defraud the United States.

"Today's arrests, and the department's largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals," Deputy Attorney General Lisa Monaco said in a statement.

The case revolves around the 2016 cyber breach of Bitfinex, during which the hacker stole some 120,000 bitcoin and transferred them to a digital wallet —akin to a virtual account — outside the exchange.

Prosecutors say that digital wallet was under Lichtenstein's control. Court papers say he and Morgan then conspired to launder those funds, conducting a series of small, complex transactions across digital platforms to try to hide the money.

But, court papers say, investigators managed to trace the stolen funds through thousands of transactions to over a dozen accounts held in the name of Lichtenstein, Morgan or their businesses. Prosecutors say the couple also set up accounts with fake names to use in their laundering operation.

Court papers say the couple cashed out the stolen bitcoin into U.S. dollars through bitcoin ATMs and the purchase of gold and non-fungible tokens as well as Walmart gift cards.

The Justice Department has recently boosted its efforts to crack down on crypto crimes and created a national cryptocurrency enforcement team last fall to focus on sophisticated cryptocurrency crimes.