Meet Heather Morgan and Ilya Lichtenstein, the couple arrested over a $4.5 billion crypto money-laundering scheme
On Feb. 8, the US Justice Department announced that Heather Morgan and Ilya Lichtenstein were arrested and charged for conspiracy to launder stolen cryptocurrency worth an estimated $4.5 billion.
The married couple allegedly laundered Bitcoin stolen in the 2016 hack of the cryptocurrency exchange Bitfinex, in which 119,754 bitcoin worth $72 million were stolen, a fraction of their current value. The breach was the second largest to hit a major exchange, according to Reuters. While the lawsuit does not directly accuse Lichtenstein and Morgan of hacking the exchange themselves, it alleges the couple “conspired to launder the proceeds” of the hack.
A “sophisticated” money laundering scheme
A legal complaint, filed in federal court in Washington DC, on Feb. 8 alleges that the couple used multiple cryptocurrency wallets and exchanges to move around money in an attempt to avoid detection.
Federal agents issued a search warrant to obtain access to Lichtenstein’s cloud storage account that held information about the couple’s cryptocurrency wallets with the stolen money, according to a government press release. The US Internal Revenue Service’s cyber crimes unit “unraveled a sophisticated laundering technique” and was able to recover $3.6 billion of the $4.5 billion in Bitcoin. The couple shuffled the funds, according to the suit, conducting a “voluminous number of transactions” to thwart investigators. Funds were sent to AlphaBay, an exchange operating on the dark web, that was shut down in 2017 by the Federal Bureau of Investigation and various unhosted wallets, which are run by an individual as opposed to a third-party like an exchange.
But the severity of the alleged crime has broadened as the price of Bitcoin has risen in the years since the hack. In August 2016, when Bitfinex was hacked, the price of Bitcoin was less than $600 a coin, though it has since skyrocketed to $44,000 a coin (At its height last November, the value of one bitcoin reached $64,000).
In a statement, Deputy Attorney General Lisa Monaco called the operation the Justice Department’s “largest financial seizure ever.”
Who are Morgan and Lichtenstein?
Morgan and Lichtenstein are both self-professed technology entrepreneurs. Morgan is the CEO of a copywriting company called SalesFolk and Lichtenstein is an “angel investor” and the co-founder and former CEO of a sales software company called Mix Rank, according to their respective LinkedIn profiles.
Morgan also moonlights as a rapper and contributing writer for business publications writing frequently about business, productivity, and entrepreneurship for Forbes and Inc. magazines. Morgan raps under the stage name Razzlekhan and, on her website, describes herself as “Genghis Khan, but with more pizzazz.” She also calls herself the “Crocodile of Wall Street.”
