Back in 2016, crypto exchange Bitfinex was hacked. Thieves made away with approximately 119,756 bitcoin, which was then worth about $61 million but would be closer to $4.5 billion today. The DoJ seized about 94,000 BTC last week valued at roughly $3.6 billion. The DoJ alleges that Ilya Lichtenstein and his wife, Heather Morgan, conspired to launder the stolen Bitcoin, which was transferred to a wallet controlled by Lichtenstein. Around 25,000 BTC were transferred out of that wallet and laundered through a series of small, complex transactions across multiple platforms, designed to conceal the path of the stolen crypto.
Lichtenstein and Morgan “Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals,” said Deputy Attorney General Lisa Monaco. “In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions.” A Justice Department official declined to comment on whether Lichtenstein and Morgan were involved in the hack itself, though it is implied in the DoJ release. Federal agents were able to access the wallet containing the stolen Bitcoin in January after decrypting a file saved to Lichtenstein’s cloud storage account that contained 2,000 wallet addresses and their private keys. Blockchain analysis confirmed that nearly all of the addresses were directly linked to the hack. Lichtenstein and Morgan appeared in a federal court in Manhattan on Tuesday. A Judge set Lichtenstein’s bond at $5 million and $3 million for Morgan. They face up to 20 years in prison for conspiracy to commit money laundering and conspiracy to defraud the US government.
Lichtenstein is described as a “technology entrepreneur, coder and investor” on his LinkedIn page, as well as the founder of blockchain-based “decentralized identity platform” Endpass—currently offline. Morgan, meanwhile, appeared to be pursuing a career as a rapper, performing under the moniker Razzlekhan, or RZK, who she describes as “like Genghis Khan, but with more pizzazz,” and money, allegedly. “The infamous Crocodile of Wall Street strikes again! More fearless and more shameless than ever before, she’s taking on everyone from big software companies to healthcare to finance bros.,” reads her website, confusingly. In between rapping, she also acts as a financial influencer.
