The ‘Crypto Couple’ Faces Guilty Plea in $4.5 Billion Bitcoin Heist

Crypto Couple is on Thursday, the husband and wife involved in a $4.5 billion bitcoin-laundering scheme are scheduled to appear in federal court for a hearing. It is expected that they will plead guilty to orchestrating an elaborate plot to sell bitcoin that was stolen during the 2016 hack of Bitfinex.

The ‘Crypto Couple’ Faces Guilty Plea in $4.5 Billion Bitcoin Heist

Crypto Couple; Ilya Lichtenstein and Heather Morgan, who are known for their eccentricities, including walking a leashed Bengal cat in Manhattan and Morgan’s rap performances under the name “Razzlekhan,” were arrested in February 2022 after the Department of Justice seized what they referred to as their “largest financial seizure ever.” Subsequently, the second-largest seizure occurred when $3.36 billion worth of bitcoin, stolen from a dark-web site years earlier, was seized by authorities later that same year.

The Federal prosecutors have alleged that Lichtenstein and Morgan used various sophisticated laundering techniques, including creating fake identities to set up online accounts, depositing funds into virtual currency exchanges and dark-web markets, and converting them into other virtual currencies to cover their tracks.

Both Lichtenstein and Morgan are charged with conspiracy to commit money laundering and conspiracy to defraud the United States, and if convicted, they could face a maximum penalty of 25 years in prison.

The saga began in August 2016 when the cryptocurrency exchange Bitfinex was hacked. Although Lichtenstein and Morgan were not accused of carrying out the hack itself, 119,754 bitcoins were moved into an outside wallet controlled by Lichtenstein as a result of the hack.

In January 2017, the bitcoin in their possession amounted to $71 million. The IRS began tracing thousands of transactions that led to Crypto Couple: Lichtenstein’s and Morgan’s personal accounts. The couple initially claimed that the bitcoin came from investments predating 2015, but incriminating evidence was found in Lichtenstein’s cloud storage, including a list of 2,000 virtual currency addresses and their private keys, all traceable back to the hack. Additionally, a spreadsheet with login information for cryptocurrency-exchange accounts was discovered, with notes about which accounts were frozen.

Authorities also uncovered evidence suggesting that Crypto Couple: Lichtenstein and Morgan had plans to escape to Russia using new identities. A folder labeled “personas” was found in Lichtenstein’s cloud storage, containing information on obtaining fake identities from the dark web. During a search warrant on their residence, authorities found hollowed-out books, numerous electronic devices, a bag labeled “burner phones,” $40,000 in cash, and foreign currency.