A hacker tied to one of the biggest crypto thefts in history has been given a five-year sentence in a United States jail for money laundering. Ilya Lichtenstein admitted his guilt last year in a case involving the 2016 hacking of the Bitfinex exchange which resulted in the theft of almost 120,000 bitcoins.
Lichtenstein conducted the laundering operation with Heather Morgan, his wife, better known by her rap name “Razzlekhan.” Back then, the stolen Bitcoin was worth approximately $70 million. However, by the time authorities apprehended the couple, the value of the cryptocurrency had skyrocketed to over $4.5 billion. Today, the bitcoin would be worth more than double that amount.
The case led to the biggest financial asset recovery in the history of the DOJ with $3.6bn seized. Lisa Monaco, the U.S. Deputy Attorney General, referred to it as a record-breaking moment for law enforcement at the time. Judge Colleen Kollar-Kotelly emphasized the significance of holding criminals accountable, stating, “These crimes carry consequences.”
Lichtenstein is still in custody since February 2022 when he was arrested. He voiced remorse for his deeds during his hearing and shared his intention to deploy his cybersecurity skills to help combat cybercrime once he has served his time.
Heather Morgan also entered a guilty plea last year to a single charge of conspiracy to commit money laundering. Her sentencing is scheduled for November 18.
Court records revealed that Lichtenstein used advanced hacking methods to break into Bitfinex’s systems and steal the Bitcoin. Afterward, he turned to Morgan to help him disguise and move the stolen crypto.
According to a DOJ statement, the duo employed a variety of sophisticated money-laundering tactics. These included creating fake identities, converting the stolen funds into different cryptos, and purchasing golden coins. Prosecutors additionally noted that Lichtenstein often travelled with family to meet couriers and transfer the laundered proceeds to his home country—Russia.
Morgan gained widespread attention online when the case became public, thanks to her persona “Razzlekan.” She released numerous rap songs and music videos filled with explicit lyrics, often shot at locations across New York City even as the two tried to cover their tracks. She described herself in her lyrics as Wall Street’s crocodile and a “bad-ass money maker.”
According to Forbes magazine articles, Morgan further described herself as a rapper, software investor, economist, and serial entrepreneur.
Cases of crypto theft like these ones could be nudging blockchain equipment manufacturers like Canaan Inc. (NASDAQ: CAN) to add functionalities to their chips so that security measures can be enhanced by their clients who are wary of falling prey to hackers.
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