The Justice Department announced Tuesday its largest-ever financial seizure — more than $3.6 billion US — and the arrest of a New York couple accused of conspiring to launder billions of dollars in cryptocurrency stolen from the 2016 hack of a virtual currency exchange.
Federal law enforcement officials said the recovered sum was linked to the hack of Bitfinex, a virtual currency exchange whose systems were breached by hackers nearly six years ago.
Ilya (Dutch) Lichtenstein, a 34-year-old citizen of Russia and the United States, and his wife, Heather Morgan, 31, were arrested in Manhattan on Tuesday morning, accused of using various sophisticated techniques to launder the stolen cryptocurrency and to conceal the transactions.
They face federal charges of conspiracy to commit money laundering and conspiracy to defraud the United States.
“The message to criminals is clear: Cryptocurrency is not a safe haven. We can and we will follow the money, no matter what form it takes,” Deputy Attorney General Lisa Monaco said in a video statement released by the Justice Department.
At an initial court appearance, a magistrate judge ruled Lichtenstein could be released into home detention on a $5 million bond co-signed by his parents; the bond amount for Morgan was set at $3 million. They were to remain in custody until the bail conditions were met.
Two Arrested for Alleged Conspiracy to Launder $4.5 Billion in Stolen Cryptocurrency<br><br>Government Seized $3.6 Billion in Stolen Cryptocurrency Directly Linked to 2016 Hack of Virtual Currency Exchange<a href=”https://t.co/4TOI59QVp6″>https://t.co/4TOI59QVp6</a> <a href=”https://t.co/cwMJyTuQfI”>pic.twitter.com/cwMJyTuQfI</a>
Prosecutors had argued defendants should be denied bail, calling them flight risks who still potentially have access to vast sums of money. In addition, during a search of their home, investigators found a folder labelled “passport ideas” that contained information on how to get fake IDs, along with a stash of burner phones, the prosecutors said.
Defence attorney Anirudh Bansal countered by telling the judge his clients had no intention of fleeing. He said they had known they were under investigation since late last year, “and still they sat tight.” He also called the charges “thin” and overblown.
“I don’t think you’ll find that billions of dollars have been laundered,” Bansal said.
Origins of hack still not entirely clear
The couple was not charged in the Bitfinex hack itself, during which a hacker initiated more than 2,000 unauthorized bitcoin transactions that sent stolen funds to a digital wallet under Lichtenstein’s control. About $71 million in bitcoin — valued today at more than $4.5 billion — was stolen, prosecutors say.
Authorities say they ultimately traced the stolen funds to more than a dozen accounts that were controlled by Lichtenstein, Morgan and their businesses.
Monaco said that investigators from multiple agencies “followed the stolen money on its complex journey, through a labyrinth of virtual currency wallets based here and abroad.” She said a number of crypto exchanges flagged the transactions as suspicious.
Court documents accuse them of relying on classic money-laundering techniques to hide their activities and the movement of the money, such as setting up accounts with fictitious names and using computer programs to automate transactions.
They also relied on AlphaBay, a dark web criminal marketplace that was dismantled by the Justice Department in 2017, as an opportunity to conceal their transactions and make them harder to trace, prosecutors said.
Millions of dollars of the transactions were cashed out through bitcoin ATMs and used to purchase gold and non-fungible tokens (NFTs) as well as more mundane items like Walmart gift cards for personal expenses, prosecutors said.
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Justice Department officials say that although the proliferation of cryptocurrency and virtual currency exchanges represent innovation, the trend has also been accompanied by money laundering, ransomware and other crimes. The Justice Department last year announced the formation of the National Cryptocurrency Enforcement Team in recognition of the trend.
“Today’s arrests, and the Department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals,” Monaco said in a statement. “In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter the form it takes.”
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
