‘Crypto couple’ pleads guilty to money laundering, as husband admits to carrying out Bitfinex hack
A New York man in court for laundering the proceeds of a 2016 heist on the Bitfinex cryptocurrency platform admitted to carrying out the hack himself, a twist in a case that has beguiled investigators.
As reported by CNBC, Ilya “Dutch” Lichtenstein, 34, made the admission while pleading guilty to laundering a portion of the stolen funds. His wife, 31-year-old Heather Morgan, also pleaded guilty on Thursday to one count of money laundering conspiracy and one count of conspiracy to defraud the United States.
Lichtenstein and Morgan, who records music under her rapper name “Razzlekhan,” were arrested last year following the seizure of 95,000 bitcoin allegedly in their control. At the time, the funds in their possession were worth $3.6 billion, and since then investigators have recovered another $475 million worth in funds related to the hack.
In all, nearly 120,000 Bitcoin were stolen, worth about $71 million at the time of the heist.
According to the Department of Justice, Lichtenstein “used a number of advanced hacking tools and techniques” to break into Bitfinex’s system.
He then fraudulently carried out more than 2,000 transactions on the platform, transferring bitcoin to a wallet in his control.
“Lichtenstein then took steps to cover his tracks by going back into Bitfinex’s network and deleting access credentials and other log files that may have given him away to law enforcement,” the DOJ wrote. “Following the hack, Lichtenstein enlisted the help of his wife, Morgan, in laundering the stolen funds.”
The couple’s laundering methods were diverse and intricate, using fake online identities to create accounts; obfuscating the proceeds with crypto mixers; funneling them through darknet marketplaces; using U.S.-based business accounts; and even converting the funds to gold coins, which Morgan then buried.
According to CNBC, it was revealed in court that Lichtenstein, a Russian emigré, traveled to Ukraine and Kazakhstan in order to convert digital assets to cash “through Russian and Ukrainian middlemen.” The money was then shipped to Russia and Ukraine, picked up by Lichtenstein and then deposited into U.S. accounts.
Lichtenstein’s charge carries a maximum of 20 years in prison, while his wife’s two counts each carry five years.
James Reddick has worked as a journalist around the world, including in Lebanon and in Cambodia, where he was Deputy Managing Editor of The Phnom Penh Post. He is also a radio and podcast producer for outlets like Snap Judgment.