'Bitcoin Bonnie and Clyde' plead guilty to money laundering hacked crypto
Married couple Ilya Lichtenstein and Heather Morgan admit hiding funds stolen from Bitfinex
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A married couple dubbed "Bitcoin Bonnie and Clyde" pleaded guilty Thursday to laundering funds stolen from cryptocurrency exchange Bitfinex in a yearslong heist dating back to 2016.
Ilya Lichtenstein admitted to hacking the exchange and enlisting his wife, Heather Morgan, an online rapper also known as "Razzlekhan," the "Crocodile of Wall Street," to help hide nearly 120,000 stolen bitcoins through an elaborate scheme.
Lichtenstein pleaded guilty to conspiracy to commit money laundering and faces up to 20 years in prison. Morgan pleaded guilty to one count of money laundering conspiracy and one count of conspiracy to defraud the United States, each of which carries a maximum penalty of five years in prison.
The couple were arrested in New York in February 2022 in what the Department of Justice said was the largest financial seizure in its history.
Ilya Lichtenstein and his wife, Heather Morgan, 31 (Department of Justice)
The DOJ recovered $3.6 billion in assets at the time and has since recovered another $475 million. Lichtenstein, 35, and Morgan, 33, jointly agreed in court to forfeit another $72 million.
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When the hack occurred, the tokens were worth around $71 million, but their value ballooned to $4.5 billion at the time of the duo's arrest.
Prosecutors say the bitcoins were stolen from Bitfinex's website over five years via some 2,000 transactions that were transferred to Lichtenstein's digital wallet. Morgan told the court Thursday that her husband had informed her in 2020 that he had hacked the exchange.
Heather Morgan, who had been arrested along with Ilya Lichtenstein in February 2022 on charges of laundering more than 100,000 bitcoins that were stolen after a hacker attacked Bitfinex in 2016, exits the E. Barrett Prettyman U.S. Courthouse, in Wash (REUTERS/Elizabeth Frantz / Reuters Photos)
The couple took several trips to Ukraine and Kazakhstan, and prosecutors said Lichtenstein used the visits to meet with "money mules" who converted cryptocurrency into government-issued currency and deposited it into Russian and Ukrainian banks. Lichtenstein and Morgan would then withdraw cash from the accounts in the United States.
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According to the criminal complaint, Lichtenstein and Morgan used an array of laundering techniques to hide the funds, including using fake identities to set up online accounts, depositing stolen funds into numerous crypto exchange accounts to cover transaction history, converting Bitcoin to other forms of virtual currency, and using U.S.-based business accounts to make the funds seem legitimate.
In this courtroom sketch, attorney Sam Enzer, center, sits between Heather Morgan, left, and her husband, Ilya "Dutch" Lichtenstein, in federal court, Tuesday, Feb. 8, 2022, in New York. (AP Newsroom)
Lichtenstein admitted to converting some of the funds into gold coins and giving them to Morgan, who buried them in California. Authorities have since dug them up.
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Morgan is free on bail, and Lichtenstein remains jailed. Sentencing dates have not yet been set for either defendant.
Reuters contributed to this report.