Federal officials seized some $3.6 billion worth of bitcoin Tuesday tied to the 2016 hack of the crypto exchange Bitfinex.

On Tuesday, agents arrested two individuals in New York on charges that they conspired to launder proceeds from the Bitfinex hack in 2016. The married couple, Ilya "Dutch" Lichtenstein and Heather Morgan, will appear in court at 3:00 p.m., according to a Department of Justice press release.

Some 120,000 BTC was stolen in the hack, worth around $60 million at the time and representing nearly one-sixth of the total trading volume at the time. At today's prices, the total amount of bitcoin stolen is valued at $4.5 billion, but the DOJ only seized about 94,000 BTC valued at $3.6 billion. The DOJ release alleges the two conspired to launder these proceeds and heavily implies, but does not claim that they were the original hacker(s).

“Unauthorized transactions” moved the stolen bitcoin to Lichtenstein’s wallet, and some 25,000 of the BTC were transferred out over the past five years. The remaining 94,000 BTC remained in Lichtenstein’s wallet.

“After the execution of court-authorized search warrants of online accounts controlled by Lichtenstein and Morgan, special agents obtained access to files within an online account controlled by Lichtenstein,” the press release said. “Those files contained the private keys required to access the digital wallet that directly received the funds stolen from Bitfinex, and allowed special agents to lawfully seize and recover more than 94,000 bitcoin that had been stolen from Bitfinex. The recovered bitcoin was valued at over $3.6 billion at the time of seizure."

Last week, on-chain sleuths spotted a transfer of over 94,000 of Bitfinex bitcoin. Sources told CoinDesk that the transfer was a seizure conducted by federal agents. In a statement, Deputy Attorney General Lisa Monaco said it was “the department’s largest financial seizure ever.”

According to an attached statement of facts, “U.S. authorities traced the stolen funds on the BTC blockchain,” as proceeds from the hack moved out of the initial recipient wallet to wallets allegedly controlled by Lichtenstein and Morgan.

Law enforcement officials were able to access the initial recipient wallet, dubbed Wallet 1CGA4s, after decrypting a file “saved to Lichtenstein’s cloud storage account,” which included 2,000 crypto wallet addresses and their private keys.

“Blockchain analysis confirmed that almost all of those wallets were directly linked to the hack,” the statement said.

The defendants allegedly used a number of techniques to launder the stolen bitcoin, including splitting transactions up into “thousands” of smaller transactions, using darknet markets and converting into other types of crypto such as monero.

The statement named darknet market AlphaBay as one such platform allegedly used by the defendants.

This is a developing story. Check back for updates.

UPDATE (Feb. 8, 2022, 17:15 UTC): Added additional information.