US Attorney’s Office requests 18 months in prison for Bitfinex hacking accomplice

What’s new? The US Attorney’s Office has requested 18 months in prison for Heather Morgan, also known as rapper Razzlekhan, for her involvement in laundering 120 000 bitcoins stolen from crypto exchange Bitfinex in 2016. Law enforcers explained that Morgan provided substantial assistance in a plea deal between her and her husband, Elijah Lichtenstein, in July 2023.

Statement from the prosecutor’s office

What else is known? Prosecutors also attributed such a lenient sentence to the fact that Morgan played a minor role in the crime and spent only a small portion of the couple’s stolen funds.

She pleaded guilty to money laundering and fraud in August 2023. The maximum penalty under the sum of the articles in her case is 10 years in prison.

Morgan and Lichtenstein were initially believed to be only responsible for laundering funds stolen from the Bitfinex hack. However, Lichtenstein later admitted that he was also directly behind the hack itself.

He pleaded guilty to one count of conspiracy to launder money, the maximum penalty in his case is 20 years in prison.

The value of the stolen bitcoins at the current exchange rate is about $7,2 billion.

The prosecution believes that Morgan initially did not know how Lichtenstein obtained the 120 000 BTC. It was not until early 2020 that Lichtenstein told Morgan that he hacked the exchange himself, and she helped launder the funds to cover up his involvement.

Prosecutors said the defendants used a variety of technologically sophisticated means to launder the stolen bitcoins, including anonymous crypto exchanges, dark web marketplaces, and crypto mixers, to obfuscate their tracks.

Morgan used some of the stolen funds to purchase gold coins, the location of which she later disclosed to authorities.

In addition to the 18-month sentence, prosecutors asked the court to order Morgan to return the crypto assets seized by the government from the hacked Bitfinex wallet as compensation to the exchange.

That wallet contains about 95 000 BTC, 117 400 Bitcoin Cash (BCH), 117 400 Bitcoin Satoshi Vision (BSV), and 118 100 Bitcoin Gold (BTG) worth more than $6 billion.

Morgan’s hearing is scheduled for November 15, and the court will announce Lichtenstein’s sentence a day earlier.

The spouses were detained in February 2022. At that time, the seizure of funds became the largest in the history of the US Department of Justice (more than $3,6 billion).

Later, the streaming service Netflix began work on a documentary series about this story.

Bitfinex is owned by its parent company iFinex, as is Tether, which issues USDT, the largest centralized stablecoin in the crypto market with a capitalization of $119,5 billion. In July, Bitfinex and Tether were hit with a new complaint over the issuance of unsecured USDT.