A TikTok rapper and her husband have recently made headlines after being charged with conspiring to launder $4.5 billion worth of cryptocurrency that was stolen from a virtual currency exchange back in 2016. Heather Morgan, 31, and Ilya ‘Dutch’ Lichtenstein, 34, both from New York, were arrested in Manhattan on Tuesday in connection to the biggest crypto heist the world has ever seen.
The couple stands accused of working together to launder the proceeds of 119,754 bitcoin that were taken from Bitfinex’s platform by a threat actor who gained unauthorized access to the exchange’s IT systems and executed over 2,000 fraudulent transactions. According to court documents, the stolen bitcoin was sent to a digital wallet controlled by Lichtenstein.
Authorities stated that over the course of five years, approximately 25,000 of the stolen bitcoin were moved out of Lichtenstein’s wallet through a complex money laundering process, with some of the illicit funds eventually ending up in financial accounts owned by Lichtenstein and Morgan. The remaining 94,000 bitcoin, with a value exceeding $3.6 billion when seized, remained in the wallet where the funds were initially deposited.
During the investigation, special agents were able to recover the majority of the stolen bitcoin by uncovering files containing the private keys needed to access the digital wallet where the funds were stored. By utilizing these keys, agents successfully retrieved over 94,000 of Bitfinex’s stolen bitcoin.
The laundering techniques employed by Morgan and Lichtenstein were described as sophisticated, involving the use of computer programs to automate transactions, depositing funds into multiple virtual currency exchanges and darknet markets, and then withdrawing the money to obscure its origin. Both individuals have been charged with conspiracy to commit money laundering and conspiracy to defraud the United States, with a maximum sentence of 25 years in prison if convicted on both counts.
Assistant Attorney General Kenneth Polite emphasized the significance of the case, highlighting the ability of federal law enforcement to track money through the blockchain. The case serves as a stark reminder of the potential consequences for those involved in illicit activities within the cryptocurrency space.