New York Couple Set to Plead Guilty in $4.5 Billion Bitcoin-Laundering Case

A married New York couple is preparing to plead guilty to charges of conspiring to launder billions of dollars worth of Bitcoin (BTC), which was stolen during the notorious 2016 hack of crypto exchange Bitfinex. 

Ilya Lichtenstein and Heather Morgan, who were charged in February last year after investigators used software to trace stolen digital currency to accounts the two owned, are preparing for a plea deal, The Wall Street Journal reported, citing a court document. 

The defendants were previously each charged with conspiracy to launder money and conspiracy to defraud the United States. 

Notably, they were not implicated in the actual hacking of Bitfinex’s network, which saw over $71 million worth of Bitcoin diverted through more than 2,000 unauthorized transfers to an external account. 

By the time of Morgan and Lichtenstein’s arrest, the stolen cryptocurrency had multiplied to a staggering $4.5 billion. 

At the time, prosecutors said have seized over $3.6 billion in Bitcoin associated with the hack.

US District Judge Colleen Kollar-Kotelly has scheduled plea hearings for August 3, 2022. 

Morgan, who has been placed under home confinement, and Lichtenstein, who has been detained since being charged, will enter their respective pleas on that date. 

The specific charges to which they will admit have not been disclosed. Morgan’s lawyer declined to provide a comment, while the attorneys representing Lichtenstein did not respond to requests for comment.

The US Attorney’s office for the District of Columbia is responsible for handling the case.

Who Are Morgan and Lichtenstein?

Morgan and Lichtenstein, who resided in a lower Manhattan apartment at the time of their apprehension, were involved in marketing-related businesses. 

Morgan, under the moniker Razzlekhan, pursued a career as a rapper and, in one of her songs, referred to herself as the “Crocodile of Wall Street,” dedicated to hackers and entrepreneurs. 

According to her LinkedIn profile, Morgan has a Master of Arts degree in international economic development from the American University in Cairo, Egypt, and a Bachelor of Arts in international relations from the University of California, Davis, USA.

On the other hand, Morgan’s partner Lichtenstein is a tech entrepreneur and founder of blockchain start-up Endpass, a cross-platform offline password management app that seeks to “securely store passwords” to “stop fraud and terrorism.” 

During the search of the couple’s residence, investigators discovered a stash of burner phones, $40,000 in cash, and an electronic file containing fake identities used to open Bitcoin accounts. 

Prosecutors also revealed the existence of a separate file that provided instructions on purchasing passports through the dark web.