Heather ‘Razzlekhan’ Morgan sentenced to 18 months in prison, ending Bitfinex saga

Heather “Razzlekhan” Morgan was sentenced to 18 months in prison on Monday for helping her husband, Ilya Lichtenstein, launder tens of thousands of bitcoin stolen from the Bitfinex cryptocurrency exchange in 2016.  

Lichtenstein, who admitted to hacking the exchange, was sentenced Friday to five years in prison. After accessing the network, he authorized thousands of transactions transferring 119,754 bitcoin — worth $71 million at the time — from the exchange to his wallet. Today, the stolen funds would be worth more than $10.8 billion. 

Morgan, who records music under her rapper name “Razzlekhan,” was handed a modest year-and-a-half sentence in part because she was not involved in the theft itself, and only became aware of the source of the stolen funds in early 2020. 

Before Lichtenstein informed her of the hack, however, Morgan “participated with Lichtenstein in efforts to conceal and obscure the source of the funds while knowing and understanding that the funds were the result of some unspecified unlawful and fraudulent activity,” prosecutors wrote in a sentencing memorandum. 

She allowed her own financial accounts to be used for laundering funds, and they set up “numerous” accounts at virtual currency exchanges and other financial institutions. They also converted bitcoin into fiat currency through Russian and Ukrainian bank accounts, and used mixers like Bitcoin Fog to obfuscate the origins of the money. In all, they laundered 25,111 bitcoin, about one-fifth of Lichtenstein’s windfall.

In their sentencing memo, prosecutors pointed to Morgan’s prior clean record and the fact that she had hardly spent any of the Bitfinex proceeds on herself in suggesting leniency. 

“She established and operated her own small business and presented as an intelligent, resourceful individual,” they wrote. “Prior to and other than her involvement in her husband’s scheme, she used her professional skillset for legitimate ends and had a record of being a productive member of society.”

In a District of Columbia courtroom on Monday, Morgan reportedly apologized for her involvement in the Bitfinex heist.  

“I am extremely sorry and deeply regret the choices I made," she said, according to the outlet CoinDesk. "I used my time and energy to do harm instead of good, and I’m ashamed of that.”