Heather Morgan, also known by her rap alias “Razzlekhan,” was sentenced to 18 months in prison by a Washington D.C. federal court for her involvement in laundering funds tied to the 2016 Bitfinex Hack. The sentencing follows her guilty plea in August 2023 to charges of money laundering conspiracy and conspiracy to defraud the United States.
Heather Morgan Sentenced to 18 Months for Laundering in Bitfinex Hack Case
According to a recent report, Heather Morgan faced charges stemming from the laundering of Bitcoin stolen during the Bitfinex Hack. Prosecutors argued that while she was not directly involved in the breach, she helped conceal and launder funds over several years. The stolen cryptocurrency, valued at $71 million in 2016, is now worth billions due to Bitcoin’s price increase.
Morgan’s role in the scheme was described as supportive, acting on instructions from her husband, Ilya Lichtenstein. She was implicated in laundering smaller portions of the 119,754 stolen Bitcoin through accounts created under false identities. Consequently, her sentence was reduced to 18 months due to her cooperation with authorities and limited role in the operation.
Additionally, Morgan’s husband, Ilya Lichtenstein was sentenced to five years in prison last week for his central role in the Bitfinex Hack. He admitted to hacking the exchange in 2016 and conspiring to launder the stolen cryptocurrency. Lichtenstein reportedly used sophisticated methods to obscure the funds’ origins, including depositing and withdrawing small amounts across exchanges and darknet markets.
The couple laundered approximately 21% of the stolen Bitcoin before their arrest. As part of a plea deal, Lichtenstein cooperated with authorities, which influenced the sentencing outcome. Both he and Heather Morgan pleaded guilty of the in 2023.
Judge Emphasizes Accountability in Crypto Laundering Case
During the sentencing, U.S. District Judge Colleen Kollar-Kotelly emphasized the need to deter similar crimes involving cryptocurrency theft. The court acknowledged Morgan’s remorse and cooperation but noted the elaborate planning required for the laundering activities. The judge stated that her actions warranted prison time, even though she played a lesser role than her husband.
More so, the US District Judge Colleen Kollar-Kotelly expressed concern over rising crypto hacks stating,
“There seems to be, particularly around cryptocurrency, more of an increase in thefts.”
Consequently, the judge concurred with U.S. prosecutors that Morgan should serve prison time as a warning and to deter others from engaging in similar offenses.
Morgan expressed regret for her actions, apologizing in court. She admitted continuing to assist in laundering funds even after learning the money stemmed from the Bitfinex Hack.
The Bitfinex hacker’s wife said,
“I used my time and energy to do harm instead of good, and I’m ashamed of that.”
The Bitfinex Hack remains one of the largest crypto hacks to date. The stolen funds, worth $4 billion at the time of seizure, underline the challenges of securing digital assets. This case adds to a growing list of prosecutions involving cryptocurrency crimes.
In a recent report, another exchange, M2 Crypto Exchange disclosed a $13.7 million cyberattack targeting its hot wallets. The breach affected BTC, ETH, and Solana assets, prompting the exchange to reimburse users and enhance security protocols.
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