- Ilya Lichtenstein has been sentenced to five years in prison for hacking Bitfinex in 2016 and laundering the funds
- His wife and accomplice, Heather Morgan, known as “Razzlekhan,” is scheduled for sentencing on November 18
- The couple was arrested in February 2022, with authorities recovering over $3.6 billion in stolen assets
Ilya Lichtenstein, a New York-based tech entrepreneur, has received a five-year prison sentence for hacking the cryptocurrency exchange Bitfinex in 2016 and laundering the funds. His wife, Heather Morgan, who performed rap videos under the alias “Razzlekhan,” is awaiting sentencing on November 18 following the couple’s arrest in February 2022. Both have pleaded guilty following the recovery of more than $3.6 billion in assets by authorities after the couple was undone by using a Walmart card bought with the stolen loot.
Eight Years in the Making
Lichtenstein, 35, carried out the hack using what the Department of Justice (DOJ) referred to as “advanced hacking tools and techniques”. Once inside the network, he fraudulently authorized more than 2,000 transactions, transferring 119,754 bitcoins from Bitfinex to a crypto wallet in his control.
Lichtenstein then took steps to cover his tracks by deleting all records of his presence, frustrating the efforts of law enforcement. Following the hack, Lichtenstein enlisted Morgan’s help in laundering the stolen funds.
The couple employed advanced methods to launder the stolen cryptocurrency, including creating fictitious identities, automating transactions, and utilizing darknet markets and cryptocurrency mixers to obscure the funds’ origins. They also converted a portion of the stolen bitcoins into gold coins, which Morgan reportedly concealed by burying them.
Two Guilty Pleas Ensure Swift Justice
Lichtenstein and Morgan were undone when they bought a Walmart gift card with the stolen bitcoins, allowing authorities to trace them and arrest them in February 2022, by which time their value had increased to $4.5 billion. The DOJ described the asset recovery as the largest financial seizure in its history.
Lichtenstein pleaded guilty to conspiracy to commit money laundering and was sentenced to five years in prison, followed by three years of supervised release. Morgan, 33, also pleaded guilty to money laundering conspiracy and is scheduled for sentencing on November 18. Prosecutors have recommended an 18-month prison term for her, citing her lesser involvement in the laundering scheme.
