Hacker jailed for laundering $1,000,000,000 in stolen Bitcoin with rapper wife
A tech entrepreneur has been jailed for laundering funds stolen from one of the biggest ever cryptocurrency thefts.
Ilya Lichtenstein, 35, hacked into the Bitfinex network in 2016 and stole around 120,000 bitcoin.
He and his wife Heather Morgan – who used the alias ‘Razzlekhan’ to promote her rap music – were arrested in February 2022.
At the time of the hack, the stolen crypto cash was worth around £56 million but had risen to more than £3.5 billion by the time they were caught and is now worth double that.
The £2.8 billion worth of assets recovered as part of the case was the biggest financial seizure in the US Department of Justice’s history.
if(window.adverts) { adverts.addToArray({"pos": "mpu_mobile_top"}) } if(window.adverts) { adverts.addToArray({"pos": "mpu_tablet"}) }Jailing Lichtenstein for five years, US District Judge Colleen Kollar-Kotelly said the theft was ‘meticulously planned’ and not an impulsive act.
‘It’s important to send a message that you can’t commit these crimes with impunity, that there are consequences to them,’ she said.
Lichtenstein apologised for ‘wasting my talents on crime instead of a positive contribution to society’.
He said he hoped to put his particular set of skills to good use by helping to fight cybercrime when he gets out of prison.
‘I want to take full responsibility for my actions and make amends any way I can,’ he said.
The judge is scheduled to sentence Morgan on Monday.
Lichtenstein pleaded with the judge to spare his wife from prison, blaming himself for her involvement.
The entrepreneur and cryptocurrency investor is a US citizen who was born in Russia and grew up in a Chicago suburb.
Morgan, a business owner and writer, adopted the alter ego ‘Razzlekhan’ for performing rap songs and recording videos for her music.
Lichtenstein and Morgan were living in New York City when they were arrested in February 2022.
They had been living in San Francisco around the time of the hack.
Prosecutors recommended a five-year prison sentence for Lichtenstein, who pleaded guilty in August 2023 to one count of money laundering conspiracy.
They recommended an 18-month prison sentence for Morgan, who pleaded guilty to the same charge.
‘Neither the hack nor the laundering scheme was an impulsive decision,’ prosecutors wrote.
‘The defendant (Lichtenstein) spent months attempting to gain access to Bitfinex’s infrastructure and get the accesses and permissions he needed in order to orchestrate his hack.’
if(window.adverts) { adverts.addToArray({"pos": "mpu_mobile_mid"}) } if(window.adverts) { adverts.addToArray({"pos": "mpu_tablet_mid"}) }Lichtenstein told his wife about the hack over three years later, but he initially solicited her help in laundering the proceeds ‘without explaining exactly what he was doing’, according to prosecutors.
Morgan ‘was certainly a willing participant and bears full responsibility for her actions, but she was a lower-level participant’, they added.
During family trips to Kazakhstan and Ukraine, Lichtenstein met with couriers who delivered him money that he smuggled back into the US.
Bitcoin is the largest and oldest cryptocurrency, which is digital money that typically is not backed by any government or banking institution.
Transactions get recorded with technology called a blockchain.
The couple successfully laundered about 21% of the funds stolen from Bitfinex.
The laundered money was worth at least $14 million (£11 million) at 2016 prices. Its value would have exceeded $1 billion at the time of their 2022 arrest.
Authorities seized the remaining funds, collectively valued at over six billion dollars at current prices.
‘He became one of the greatest money launderers that the government has encountered in the cryptocurrency space,’ prosecutors wrote.
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Read More StoriesAn attorney for Bitfinex said the hack ‘devastated’ its finances and its reputation with its customers, with the stolen funds accounting for approximately 36% of the company’s assets at the time of theft.
Over 96% of the stolen funds have been recovered with help from Lichtenstein, according to defence lawyer Samson Enzer.
The ‘vast bulk’ of the stolen money was never spent, the lawyer said.
‘This is not an evil person,’ Mr Enzer said. ‘This is a good person who made some very bad mistakes.’
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Hacker jailed for laundering $1,000,000,000 in stolen Bitcoin with rapper wife
Hacker jailed for laundering $1,000,000,000 in stolen Bitcoin with rapper wife
Hacker jailed for laundering $1,000,000,000 in stolen Bitcoin with rapper wife
Hacker jailed for laundering $1,000,000,000 in stolen Bitcoin with rapper wife
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