US Hacker Gets 5-Year Prison Sentence Over Record-Breaking $4.5 Billion Bitcoin Theft

Lichtenstein and Morgan used fake identities and crypto swaps to launder stolen funds.

By Thea Felicity

Nov 15 2024, 09:51 AM EST

US-CRYPTOCURRENCY-CRIME — This illustration photo shows Heather Morgan, also known as "Razzlekhan," on a phone in front of the Bitcoin logo displayed on a screen, in Washington, DC, February 9, 2022. - A couple accused of seeking to launder the bitcoin were arrested in New York, the department said. Ilya Lichtenstein, 34, and his wife Heather Morgan, 31, were set to appear in federal court over the charges later in the day. OLIVIER DOULIERY/AFP via Getty Images

A US Hacker has just been sentenced for pleading guilty to washing funds from a cryptocurrency exchange.

The mastermind, Ilya Liechtenstein, stole nearly 120,000 Bitcoins at that point in time, which was valued at almost $70 million from the Bitfinex platform in 2016. The cryptocurrencies were over $4.5 billion by the time he was caught and maybe even more expensive now.

According to BBC, Lichtenstein and his wife, Heather Morgan, employed advanced techniques to hide the stolen funds. These included creating fake identities, transferring funds between different cryptocurrencies, and purchasing gold coins. The hacker even used family trips to move the laundered money via couriers.

Morgan, who went by the stage name "Razzlekhan," used her hip-hop persona to distract from their activities. Her music videos and articles promoted her as a tech-savvy entrepreneur while hiding her involvement in the laundering.

DOJ On Lichtenstein and Morgan's Bitcoin Theft

Authorities discovered Lichtenstein and Morgan's involvement in the Bitcoin heist during an investigation into suspicious blockchain transactions. These flagged transactions led investigators to wallets linked to the stolen Bitcoin from the 2016 Bitfinex hack. Currently, the US Department of Justice has only seized $3.6 billion worth of assets related to the case, the largest recovery in its history. According to the assigned judge, the importance of this case could help deter such crimes, stating that criminals cannot act with impunity.

In 2022, Forbes reported that Lichtenstein had been arrested and has been in custody ever since. The hacker expressed regret for his actions and stated his intent to use his skills to fight cybercrime after his release.

Morgan, who also pleaded guilty to money laundering, is set to be sentenced on November 18. Experts believe she will face charges of conspiracy to commit money laundering for her role in helping her husband conceal the stolen cryptocurrency over logistical support, including facilitating the movement of laundered funds and assisting in covering their tracks.