Good day everybody,
Welcome to CryptoGod-1's blog on all things crypto. In this post I will be looking at the news regarding Ilya Lichtenstein and Heather Morgan, a couple in New York who have been referred to as the Bitcoin Bonnie & Clyde after their alleged involvement in a $4.5B Cryptocurrency Laundering scheme.
Morgan and Lichtenstein
Possibly one of the most interesting and oddest couples to ever be involved in a crypto scam, let alone one of the biggest in American history, Morgan and Lichtenstein are a Russian American tech entrepreneur and his wife, an aspiring rapper. They are currently preparing to plead guilty to charges of conspiring to launder billions of dollars worth of crypto, which is associated with the Bitfinex hack back in 2016. They were charged in February of 2022 and will have their next scheduled court appearance on the 3rd of August 2023.
Ilya Lichtenstein was born in 1988 and was considered quite famous for his investments and business. He was also working as a mentor in 500 Startups since 2012. He had attended Glenbrook South High School and from there went on to the University of Wisconsin-Madison where he graduated with a degree in Psychology. He also began working in the IT field during his college days, and from there developed his interest in coding and investing.
Heather Rhiannon Morgan meanwhile is a famous rapper and investor. She is two years younger than Lichtenstein, born in 1990 or 1991. She was born in Oregon, but grew up in California. She graduated with in 2011 with a bachelor’s degree in economics from UC Davis. She worked for the World Bank in both Cairo and Hong Kong, and she founded SalesFolk, an e-mail marketing firm, while living in San Francisco. Morgan also produced rap videos under the stage name Razzlekhan, in which she described herself as the "Crocodile of Wall Street".
The pair got married in 2021, after the pair had apparently got engaged in 2019. They had a lavish wedding in the United States, but have no known children.
2016 Hack of Bitfinex
One of the world’s largest virtual currency exchanges, Bitfinex was based in Hong Kong and in 2016 it was hacked for 119,754 Bitcoin, worth $71 million at the time. It was a hack that shook the crypto community, and saw the price of Bitcoin plummet. The breach was just one of several breaches at the time which exposed the vulnerability of digital currencies, and resulted in large amounts of digital currency being stolen. Although at the time a lack of regulation was cited as one of the main components in the cryptocurrency scandals, there was little evidence to point to this.
In the following years, not much has developed in terms of regulation, albeit the governments are trying. However, the most interesting point of the theft was that between 2016 and 2022, the value of the Bitcoin stolen by Morgan and Lichtenstein rose from around $71 million to being valued at $4.5 Billion. While neither of Morgan and Lichtenstein were charged or arrested for the actual crime of the hacking of Bitfinex, they were caught in what was at the time the Justice Department’s largest financial seizure ever. They had made one grave mistake in their theft, and that was not fully realising that they were tracked via the blockchain, and that their multitude of transactions, which totalled over 2,500, had not covered their tracks.
Failure to Launder $4.5 billion
Their scheme involved hacking Bitfinex's systems and making over 2,000 transactions to send the stolen currency to a digital wallet under Mr. Lichtenstein’s control. Over the following five years or so, about 25,000 digital tokens were transferred out of this wallet as part of a complex series of transactions which were meant to obscure their origin. This included opening accounts under false names; moving stolen funds in small sums in thousands of transactions to avoid detection; using computers to automate their transactions; spreading funds across virtual-currency exchanges; and using U.S. business accounts to conceal their illegal activity.
As part of their efforts, they used some of the stolen Bitcoin to purchase gold, nonfungible tokens and prepaid debit cards. They were arrested in February 2022 while in a two-bedroom condominium on an upper floor of a 42-story luxury building at the intersection of Wall and Water Streets in Lower Manhattan. At the time they pled not guilty to the charges, which included money laundering conspiracy and conspiracy to defraud the United States.
Current Status
Lichtenstein is currently being held in a Washington, D.C. jail since his arrest as he has not been allowed bail. This is because he is considered a flight risk. Morgan meanwhile is free on a $3 million bond pending the outcome of negotiations. After investigators had used software to trace the stolen funds of the Bitfinex hack back to them, they were with conspiracy to launder money and conspiracy to defraud the United States. It is notable they were not charged with the hack of Bitfinex as part of those charges.
The pair are preparing for a plea deal according to a court document. The US District Judge Colleen Kollar-Kotelly has scheduled these plea hearings for the 3rd of August, 2023. The specific charges for which they will admit have not been disclosed, and Morgan's lawyer declined to provide a comment. The attorneys representing Lichtenstein also refused to comment on the case.
Judge Kollar-Kotelly noted in the court docket that the defendants’ paperwork must include:
“charged offense(s) and statutory provision; charge(s) in plea and statutory provision; elements of the offense; copy of the plea agreement; penalties; and [federal sentencing] guideline calculations,”
Have a great day.
Peace. CryptoGod-1.
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