An In-Depth Look at the Couple Accused of Laundering 94,636 Bitcoin From the 2016 Bitfinex Hack

On Tuesday, the U.S. Department of Justice (DOJ) arrested 2 individuals that are accused of an “alleged conspiracy to launder” 94,636 bitcoins stolen from Bitfinex successful 2016. Interestingly, some of the suspects are known individuals wrong the tech manufacture arsenic Ilya Lichtenstein was the co-founder of Mixrank, a Y-Combinator backed startup and Heather Morgan was a writer for Forbes.

The Myriad of Mysterious Bitcoin Transfers From the 2016 Bitfinex Hack

The U.S. authorities announced the “largest cryptocurrency seizure to date” aft the DOJ seized 94,636 bitcoins that were stolen successful the August 2016 Bitfinex hack. On August 2, 2016, a hacker managed to breach Bitfinex and bargain 120,000 bitcoin (BTC). Bitcoin’s terms shuddered 24 hours aft the breach losing 22% successful USD value during the people of the aftermath. At first, Bitfinex talked astir reimbursing customers with a bail-in haircut plan, which means traders would lone get a fraction of losses.

Two weeks aboriginal aft the 120,000 BTC was stolen, Bitfinex gave the crypto assemblage an investigation update. Instead of pursuing done with the haircut plan, Bitfinex introduced “recovery rights tokens,” successful bid to marque amends with the customers who mislaid funds. The coins were called BFX tokens and by April 3, 2017, astatine 8 p.m. UST (4 p.m. EST), the crypto speech revealed it had paid its indebtedness successful full. However, aft this constituent successful time, radical stopped talking astir the Bitfinex stolen bitcoins, but the addresses holding the coins were monitored.

Onchain researchers and blockchain parsers person been monitoring the Bitfinex hack bitcoins for a agelong time. In February 2019, Bitfinex told the nationalist that it had recovered 27.66270285 BTC from the 2016 breach.

In June 2019, the thieves moved 170 BTC and past 300 BTC successful August 2019. On May 21, 2020, 30 coins from the Bitfinex hack started moving, and had been transferred erstwhile again to different chartless address. On June 11, 2020, hackers moved stolen Bitfinex coins, arsenic they transferred 416 bitcoin to an chartless address. About a week later, the thieves moved 2,500 bitcoins and successful October 2020, the hackers transferred 2,034 BTC to chartless wallets.

5,045 BTC was moved by the hackers connected December 1, 2020, and past connected April 14, 2021, thousands upon thousands of stolen Bitfinex bitcoins were transferred, and caught by blockchain parsers. But the most antithetic move of them each was connected February 1, 2022, erstwhile 94,643.29 bitcoin was consolidated into 1 code with nary privacy-preserving tactics used. The moved bitcoins connected February 1, represented 79.03% of the 119,756 BTC stolen connected August 2, 2016.

Ilya Lichtenstein and Heather Morgan: The Duo Accused of Laundering Billions successful Bitcoin Stolen From Bitfinex

Following the unusual transfer, the DOJ announced connected February 8, 2022, that it seized astir 94,636 bitcoins and arrested 2 individuals. The accused Bitfinex bitcoin wealth launderers were Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31. Both of the accused bitcoin launderers were good known successful the tech assemblage and did not fell their beingness online. Lichtenstein was the co-founder and CEO of Mixrank, which is fundamentally a lawsuit find level that works with income representatives. Mixrank and Lichtenstein managed to raise $1.5 million from Mark Cuban and different investors.

Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31.

Lichtenstein had nary occupation with nationalist appearances and speaking successful interviews astir his entrepreneurship. Lichtenstein’s woman Heather Rhiannon Morgan was besides not shy and was a contributor astatine Forbes, and wrote articles astir things similar cybercriminals. Morgan had adjacent to 5,000 Instagram followers and she considered herself a thoroughfare rapper and was called “Razzlekhan.” While performing and acting arsenic her change ego Razzlekhan, she besides called herself “the Crocodile of Wall Street,” and the instrumentalist published a dedicated website.

Lichtenstein’s woman Heather Rhiannon Morgan was a rapper who called herself ‘Razzlekhan.’

“Just similar her fearless entrepreneurial tone and hacker mindset, Razz shamelessly explores caller frontiers of art,” the web portal razzlekhan.com says. In fact, links are littered each implicit the net astir Lichtenstein and Morgan, arsenic they some had a batch of entrepreneurial spirit. Morgan’s Linkedin illustration says she is simply a “Serial Entrepreneur, SaaS Investors, and Surrealist.” Lichtenstein studied science astatine the University of Wisconsin and worked for galore selling jobs. He besides has a dual U.S. and Russian citizenship aft surviving determination during his youth. After Lichtenstein’s vocation astatine Mixrank, helium allegedly worked for a “stealth information startup.” The duo’s matrimony is reasonably caller arsenic well, arsenic Morgan and Lichtenstein got joined successful November 2021.

In summation to moving for a “stealth information startup,” Lichtenstein was an angel capitalist astatine Demandpath. According to the website, Demandpath is “a boutique micro-fund investing successful the adjacent procreation of promising technologies.” When the duo was arrested successful Manhatten, the DOJ said that “thanks to the meticulous enactment of instrumentality enforcement, the section erstwhile again showed however it tin and volition travel the money, nary substance what signifier it takes.” However, the DOJ did not disclose however the mates primitively obtained the funds.

The U.S. authorities besides did not item what volition hap to the seized bitcoin (BTC), but it’s assumed the coins volition beryllium auctioned similar anterior seizures. While nary 1 knows close present however Lichtenstein and Morgan archetypal got progressive with the Bitfinex hack bitcoins, the nationalist is good alert that the duo did not fell oregon effort to support themselves secretive. The couple, who were joined successful November 2021, broke the news that they would wed successful the summertime months earlier the wedding.

“[Heather Morgan is my] champion person and the pistillate of my dreams,” Lichtenstein said astatine the time.

Currently, the mates remains successful situation due to the fact that tribunal prosecutors accidental the duo “presents a superior hazard of flight.” The court prosecutors’ filing claims Lichtenstein and Morgan whitethorn inactive person 7,506 ill-gotten bitcoin (BTC). If true, that would permission $333.8 cardinal utilizing existent BTC speech rates astatine the duo’s disposal.

“The probe besides showed that Lichtenstein and his wife, Morgan, engaged successful extraordinarily analyzable laundering of a information of the stolen funds stored successful wallet 1CGA4s,” the filing details. “Specifically, opening successful oregon astir January 2017, a information of the stolen BTC moved retired of wallet 1CGA4s successful a bid of small, analyzable transactions crossed aggregate accounts and platforms.” The Washington justice presiding implicit the lawsuit halted the couple’s accidental astatine bail aft the prosecutors filed the formation hazard concerns.

What bash you deliberation astir the mates accused of laundering the 94,636 bitcoin seized by the DOJ? Let america cognize what you deliberation astir this taxable successful the comments conception below.

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