That’s till Thursday, when tech entrepreneur Ilya “Dutch” Lichtenstein admitted in federal court docket to hacking Bitfinex seven years in the past. He and his spouse, Heather Morgan, a advertising and marketing professional who moonlights as a rapper, had been arrested final 12 months on cash laundering expenses. Dubbed “Bitcoin Bonnie and Clyde,” the couple was accused of attempting to launder a fraction of the stolen bitcoin — 25,000 to be actual. The remainder — price roughly $3.6 billion — remained in a digital pockets that federal authorities finally gained entry to, resulting in the largest single seizure of funds in Justice Department history.
Nonetheless, neither Lichtenstein nor Morgan had been implicated in the hack itself — till Lichtenstein delivered the bombshell revelation in the identical Washington courthouse the place former president Donald Trump would be indicted hours later.
On Thursday, Lichtenstein pleaded guilty to conspiracy to commit cash laundering and now faces as much as 20 years in jail. His spouse entered a guilty plea to 1 rely of cash laundering conspiracy and one rely of conspiracy to defraud the USA, every of which carries a most penalty of 5 years in jail.
Attorneys for Lichtenstein and Morgan didn’t instantly reply to requests for remark from The Washington Put up. A sentencing date nonetheless hasn’t been scheduled.
When the Division of Justice introduced the arrests in February 2022, the web turned enthralled by Lichtenstein and Morgan, not merely due to the case’s weird twists and complexities but additionally due to Morgan’s expansive and quirky social media footprint.
Lichtenstein was the extra low-key determine in the husband-and-wife duo — a twin citizen of Russia and the USA who grew up in a Midwest suburb and whose highschool good friend described him as “introverted however actually tech-savvy.” Morgan, nevertheless, showcased two considerably distinct personas throughout her quite a few social media profiles: one as an bold enterprise govt and author, and one other because the self-proclaimed “Crocodile of Wall Avenue,” a surrealist rapper with “more pizazz” than Genghis Khan.
Following their arrests, the songs Morgan launched below her creative title “Razzlekhan,” which she described as “horror-comedy, with a splash of weird allure,” had been dissected throughout Twitter. Her movies — together with one among Morgan marveling on the measurement of her plate of pancakes and one other of her strutting down the streets of Manhattan in a shiny gold jacket — had been broadly shared. The reactions they elicited ranged from mocking to incredulity — and many had been left flabbergasted on the prospect of such unorthodox characters pulling off a fancy scheme investigators mentioned required a “refined laundering approach.”
Courtroom paperwork describe how Lichtenstein on Aug. 2, 2016, employed a slew of superior hacking instruments and strategies to purloin 119,754 bitcoin, or greater than half of Bitfinex’s stock on the time, in below 4 hours. In line with prosecutors, Lichtenstein transferred the cash to a cryptocurrency pockets below his management via greater than 2,000 transactions and then lined his tracks by deleting the entry credentials in Bitfinex’s community.
What occurred subsequent was the monetary equal of stealing a pumpkin and having it all of the sudden flip right into a magical horse carriage. On the time of the hack, bitcoin’s worth hovered round $600 — however the worth skyrocketed through the years, reaching a peak of greater than $68,000 in 2021. As the cash grew, the couple tried to launder it by funneling the funds into dark-net marketplaces, changing the bitcoin into different types of cryptocurrency, opening accounts below false names and shifting the stolen funds in 1000’s of small-sum transactions to keep away from detection, in response to prosecutors.
A tiny quantity of the funds was additionally spent on non-fungible tokens (NFTs), in addition to a Walmart present card and funds to Uber, Motels.com and PlayStation, in response to a legal grievance.
Throughout Thursday’s plea listening to, prosecutors mentioned Lichtenstein had used the property to purchase gold cash, which Morgan helped bury in California, Reuters reported. The 2 additionally traveled to Ukraine and Kazakhstan to fulfill with middlemen to transform the bitcoin into money, which was then shipped to addresses in Russia and Ukraine and subsequently picked as much as be deposited into American accounts, prosecutors mentioned.
The couple’s actions in Ukraine “at instances seem pulled from the pages of a spy novel,” prosecutors wrote in a court docket submitting final 12 months — and they “seem to have been establishing a contingency plan for a life in Ukraine and/or Russia previous to the COVID-19 pandemic.”
These alleged plans, nevertheless, got here crashing down on Jan. 5, 2022, when federal brokers searched the couple’s residence in New York Metropolis. There, authorities encountered a slew of supplies that raised alarms: $40,000 in money and a “substantial quantity” of overseas foreign money, a set of hollowed-out books and a listing of distributors promoting pretend passports, in response to court docket paperwork.
Investigators additionally discovered a number of cellphones — inside a bag labeled “Burner Cellphone.”
Lichtenstein and Morgan had been arrested on Feb. 8, 2022. Three days later, Netflix commissioned a sequence concerning the couple’s scheme, which is ready to be directed by the chief producer of “Tiger King.”
And whereas it’s unclear when the streaming big’s take will debut, CNBC’s “American Greed” docuseries devoted an episode to Lichtenstein and Morgan in October. A Hulu sequence starring Lily Collins as Morgan can be in the works.
