The Case of the Couple Accused of Laundering $4.5 Billion From the Bitfinex Hack Continues

An American couple has been charged for an alleged conspiracy to launder cryptocurrency embezzled during the 2016 hack of Bitfinex, a virtual currency exchange currently estimated at nearly $4.5 billion.

Lichtenstein and Morgan are accused of conspiracy to launder money and defraud the United States.

Ilya Lichtenstein, a 34 Dutch, and his wife, Heather Morgan, 32, the self-acclaimed “Crocodile of Wall Street,” were expected to appear in a federal court this coming Friday in Washington.

However, in a court filing on Monday, U.S. Memorial Day, federal prosecutors pleaded to postpone the hearing until August 2, mentioning “dialogues regarding possible resolutions of the case short of trial” and the need for the defendants to review “voluminous financial records” alleged by the government.

In February, Lichtenstein and Morgan were apprehended and charged in a criminal complaint with conspiring to launder 119,754 bitcoin stolen after a hacker in 2016 hacked into Bitfinex and performed more than 2,000 unauthorized transactions.

Bitfinex Scam

U.S. Justice Department officials disclosed the transactions at the time were valued at $71 million in bitcoin. Still, with the increase in the currency’s value, the value has been worth $4.5 billion during their arrest.

The couple had active public profiles, with Morgan known as rap singer “Razzlekhan,” a pseudonym she said on her website referred to Genghis Khan “but with more pizzazz.”

A grand jury has yet to return a charge against the pair after prosecutors first signaled in March that they had decided to halt the Speedy Trial Act to discuss a possible plea deal.

Lichtenstein is jailed without bond, while Morgan was placed on house arrest.

“Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a haven for criminals,” said Deputy Attorney General Lisa O. Monaco.

“In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the department once again showed how it could and will follow the money, no matter what form it takes,” he added.

A New York couple accused of laundering $4.5 billion in crypto is still negotiating a possible plea deal. The couple was arrested in February, accused in a criminal complaint of conspiring to launder bitcoin and initiating unauthorized transactionshttps://t.co/F95u6Jm2B9 pic.twitter.com/K5usKXoUvC

— Reuters Legal (@ReutersLegal) May 31, 2022

The DoJ “and our office stand ready to confront these threats by using 21st-century investigative techniques to recover the stolen funds and hold the perpetrators accountable.” U.S. Attorney Matthew M. Graves for the District of Columbia said.

Chief Jim Lee of IRS-Criminal Investigation (IRS-CI),in his speech, said “the defendants allegedly laundered and disguised their vast fortune,”but the “IRS-CI Cyber Crimes Unit special agents have once again unraveled a sophisticated laundering technique, enabling them to trace, access and seize the stolen funds, which has amounted to the largest cryptocurrency seizure to date, valued at more than $3.6 billion.”

“Today, federal law enforcement demonstrates once again that we can follow the money through the blockchain and that we will not allow cryptocurrency to be a haven for money laundering or a zone of lawlessness within our financial system,” a statement from the Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The arrests today show that we will take a firm stand against those who allegedly try to use virtual currencies for criminal purposes.”

The couple is facing conspiracy charges to launder money and conspiracy to defraud the United States, which respectively attract 20 years and five years in prison.