United States v. LICHTENSTEIN
1:23-cr-00239
| D.D.C. | Mar 10, 2025Background
- Multiple petitioners/third-party claimants sought to assert property interests in digital currency forfeited to the government, which was originally hacked from Bitfinex and laundered by defendants Lichtenstein and Morgan.
- Six petitioners (the “Motion-to-Seal Petitioners”) moved to proceed pseudonymously and/or to file under seal due to privacy and security concerns.
- Petitioners requested to redact their names, personally identifiable information (PII), account numbers, and the specific asset amounts claimed in publicly filed documents.
- The government did not oppose redacting names and PII but opposed sealing specific asset amounts, citing the public's right of access and transparency concerns.
- The Court considered both the Hubbard factors (presumption of public access vs. privacy interests) and the Sealed Case factors (for proceeding anonymously), referencing controlling D.C. Circuit precedent.
- This opinion consolidates and rules on various motions to seal, granting in part and denying in part the sealing requests.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can petitioners proceed pseudonymously/under seal? | Petitioners cite privacy/safety concerns due to association with large cryptocurrency holdings. | Government does not oppose redacting names/PII, but opposes broader sealing. | Granted in part: Names and PII may be redacted; asset amounts must remain public. |
| Should specific asset amounts be sealed/redacted? | Petitioner claims public disclosure of asset size increases risk of theft or harm. | Government argues asset amounts are integral to judicial transparency and claim adjudication. | Denied: Asset amounts cannot be sealed. |
| Who should have access to information redacted from public filings? | Petitioners suggest only the government needs the unredacted info. | Government in favor of sharing with all competitive claimants in ancillary proceedings. | Held: All petitioners in ancillary proceedings get access to redacted info. |
| Standard for sealing in high-public-interest cases | Petitioner urges use of Sealed Case anonymity factors; situational privacy outweighs openness. | Government relies on Hubbard test, emphasizing strong public access presumption. | Court applies Hubbard; finds only limited sealing justified, stressing transparency. |
Key Cases Cited
- United States v. Hubbard, 650 F.2d 293 (D.C. Cir. 1980) (establishes the presumption of public access and articulates the six-factor test for evaluating requests to seal court records)
- Washington Post v. Robinson, 935 F.2d 282 (D.C. Cir. 1991) (reiterates the strong presumption of public access to court documents)
- In re Leopold, 964 F.3d 1121 (D.C. Cir. 2020) (affirms the continued use of the Hubbard test for evaluating motions to seal or unseal judicial records)
- Metlife, Inc. v. Fin. Stability Oversight Council, 865 F.3d 661 (D.C. Cir. 2017) (explains the rationale for transparency in judicial proceedings)
- United States v. BCCI Holdings (Luxembourg) S.A., 46 F.3d 1185 (D.C. Cir. 1995) (explains the need for specificity in property claims in forfeiture proceedings)