The self-proclaimed ‘Crocodile of Wall Street’ and her husband are scheduled to appear in court on August 3 for separate arraignments and plea hearings. However, the specific charges contained in the document have not been made public.
Morgan, 31, and her Russian-born husband, Ilya “Dutch” Lichtenstein, 34, face up to 25 years in federal prison after being charged with money laundering and fraud following their arrests in February 2022. Their custody came after the FBI discovered the bitcoin stolen in Bitfinex hack in crypto wallets controlled by the crypto’s most notorious couple.
“Over the last five years, approximately 25,000 of those stolen bitcoin were transferred out of Lichtenstein’s wallet via a complicated money laundering process that ended with some of the stolen funds being deposited into financial accounts controlled by Lichtenstein and Morgan,” the DOJ said.
The couple allegedly employed various money-laundering techniques. Specifically, they set up accounts using fake identities and engaged in a series of numerous small transactions, collectively amounting to roughly 25,000 transfers. This common tactic was utilized to evade detection and make the movement of the stolen coins more inconspicuous.
In addition, the couple dispersed the funds across various cryptocurrency exchanges, a practice that raised suspicions and resulted in some of their accounts being frozen. Prosecutors said that they were slowly attempting to launder the stolen money and had plans to flee to Russia if necessary.
The case raised questions about the couple’s involvement in the original cyber attack, but they have not been charged with perpetrating the hack itself. The plea agreement, once entered, will likely provide further details on the resolution of the case.
The couple’s arrest, along with Heather Morgan’s prominent social media presence as a comedic rapper called Razzlekhan, garnered media attention. While the investigation continues, Morgan and Lichtenstein’s followers were surprised to learn about their alleged involvement in the illicit fortune, as they had portrayed themselves as typical Silicon Valley individuals.
Ilya Lichtenstein has been held without bail since his arrest, while Heather Morgan was released on a $3 million bond and placed under home confinement.
Bitfinex was hacked in 2016 to the tune of 119,756 BTC, which was worth $72 million at the time of the hack but is now equivalent to $3.8 billion given the inflation in BTC prices.
In terms of how the hack happened and the identity of hackers themselves, it’s still pretty vague despite indicting two Israeli brothers as partially responsible for the attack. All we know is that Bitfinex’s multi-signature accounts were somehow compromised, and the exchange distributed losses amongst all users to the tune of 36% of their balances.
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