Heather Rhiannon Morgan (aka “Razzlekhan”, 33) pled guilty to a money laundering conspiracy in connection with the 2016 Bitfinex hack on Thursday, which saw more than 119,756 Bitcoin (BTC) robbed from customers.
This came moments after her husband, Ilya “Dutch” Lichtenstein (35), pleaded guilty to being the man behind the hack itself.
Bitfinex Hacker Confirmed
In Washington, D.C., federal court, Lichtenstein confessed to both stealing and laundering the funds, officially clearing the air on a years-long mystery around one of the largest thefts in Bitcoin history. At the time of the hack, the exchange’s stolen BTC was worth roughly $71 million but is worth $3.4 billion today.
“Lichtenstein used a number of advanced hacking tools and techniques to gain access to Bitfinex’s network,” wrote the Department of Justice in a press release on Thursday, citing court documents.
He then “enlisted” his wife, Morgan, for support in laundering the funds and covering his tracks, using “sophisticated methods” including fictitious identities, darknet markets, chain hopping, and cryptocurrency mixing services. Some popular crypto mixers (ex. Blender, Tornado Cash) have already been sanctioned by the U.S. Treasury Department.
Liechtenstein confessed during his plea hearing that some of the stolen funds were converted into gold coins that were later buried by Morgan. Law enforcement officials now know the location at which they’re buried.
He also converted some of his crypto into cash through middlemen, during his past travels to Ukraine and Russia. He picked up that cash physically at addresses in both nations, then deposited the money into U.S. accounts to be retrieved in New York City.
The Sentence
For their crimes, Lichtenstein faces a maximum of 20 years in prison, while Morgan faces a maximum sentence of 5 years.
The defendants were arrested in February 2022, and most of their stolen Bitcoin – 95,000 BTC – was seized by the government. The reclaimed assets were worth $3.6 billion at the time, making it the largest financial seizure in history.
In a statement, Bitfinex acknowledged having worked with the DOJ to recover the stolen Bitcoin and make customers whole.
“After seven years, those efforts have come to fruition,” the company said.
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