Individual involved in Bitcoin laundering confesses and acknowledges responsibility for significant Bitfinex breach

Individual involved in Bitcoin laundering confesses and acknowledges responsibility for significant Bitfinex breach

A man from New York has confessed to being the original hacker behind the 2016 cyberattack on Bitfinex, during which bitcoin worth $4.5 billion was stolen. Ilya “Dutch” Lichtenstein, aged 35, made this stunning admission while pleading guilty to laundering the stolen bitcoin in a federal court in Washington, D.C. His wife, Heather Rhiannon Morgan, aged 33 and known as “Razzlekhan” and “The Crocodile of Wall Street,” also entered her own guilty plea to money laundering conspiracy and conspiracy to defraud the United States government.

Prior to Lichtenstein’s admission in court, the identity of the hacker responsible for the Bitfinex breach was not publicly known. However, the couple was not charged in connection with the actual hack itself. Lichtenstein faces a maximum sentence of 20 years in prison for conspiracy to commit money laundering, while Morgan could be sentenced to a maximum of five years in prison. Lichtenstein, who has been held without bond since his arrest, will remain in jail until sentencing and has agreed to cooperate with federal investigators.

During their arrest in February 2022, more than 94,000 bitcoins were seized by officials out of the more than 119,000 stolen bitcoins. The DOJ later seized an additional $475 million linked to the hack. Bitfinex acknowledged the hack and made efforts to compensate its customers over the years. The stolen bitcoin’s value had initially been $70 million but grew to $4.5 billion over time.

According to the Department of Justice, Lichtenstein used advanced hacking tools and techniques to gain access to Bitfinex’s network and fraudulently authorized thousands of transactions, transferring the stolen bitcoin to a cryptocurrency wallet under his control. He then attempted to cover his tracks by deleting access credentials and log files. Morgan assisted in laundering the stolen funds.

At the plea hearings, it was revealed that Lichtenstein had converted some assets to gold coins, and Morgan had hidden gold coins in a location now known to law enforcement. Lichtenstein’s past travel to Ukraine and Kazakhstan was also discovered to have been for converting digital assets to cash through middlemen, which were then sent to addresses in Russia and Ukraine and later deposited into U.S. accounts for his retrieval in New York City.

The couple’s separate plea hearings were rescheduled to an earlier time due to former President Donald Trump’s arraignment at the same courthouse. Last month, a charging document disclosed that Lichtenstein used a series of complex transactions to move a portion of the stolen bitcoin, aiming to conceal the funds’ path.

Netflix had announced plans to commission a series about the Crypto Couple following their arrest in the previous year.