Rapper Razzlekhan, Husband Plead Guilty To $3.5 Billion Crypto Hack Tied To Bitfinex
A married couple hailing from New York City has pleaded guilty to charges related to money laundering conspiracies linked to a major hack that resulted in the theft of around 120,000 bitcoins from Bitfinex, a prominent global cryptocurrency exchange.
Ilya Lichtenstein, aged 35, and his wife Heather Morgan, aged 33, were apprehended in February 2022 after authorities successfully seized approximately 95,000 of the stolen bitcoins from cryptocurrency wallets under their control. The value of the recovered funds at the time of the seizure was an astounding $3.6 billion. Subsequently, the government continued its investigation and seized an additional approximately $475 million associated with the hack.
Morgan, also known as the rapper “Razzlekhan”, and her husband Lichtenstein were known for their involvement in the 2016 hacking of the cryptocurrency exchange Bitfinex. The new development comes a year and a half after their arrest and subsequent charges in February 2022, and seven years after the initial hack.
According to court documents, Lichtenstein utilized advanced hacking tools and techniques to infiltrate Bitfinex’s network. Once inside, he deceitfully authorized over 2,000 transactions, moving a staggering 119,754 bitcoins to a cryptocurrency wallet he controlled, valued at $72 million at the time of the heist, and currently worth approximately $3.5 billion. The motive behind the hack was primarily to enrich himself personally.
To evade detection, Lichtenstein carefully covered his tracks by erasing access credentials and log files that could potentially lead law enforcement to his location. After the hack, Lichtenstein enlisted the assistance of his spouse, Morgan, to launder the stolen funds.
The couple employed a series of sophisticated money laundering techniques, including the creation of fictitious identities to establish online accounts, automated transactions using computer programs, and depositing the stolen funds into various darknet markets and cryptocurrency exchanges. This process disrupted the trail of transaction history by breaking up the flow of funds. Additionally, they converted the stolen bitcoins into other cryptocurrencies, including anonymity-enhanced ones, through a practice known as “chain hopping.”
Furthermore, they deposited part of the criminal proceeds into cryptocurrency mixing services like Bitcoin Fog, Helix, and ChipMixer. The couple also utilized U.S.-based business accounts to give a veneer of legitimacy to their banking activities. Moreover, a portion of the stolen funds was exchanged for gold coins, which Morgan then concealed by burying them.
Lichtenstein has pleaded guilty to conspiracy to commit money laundering, an offense that carries a maximum penalty of 20 years in prison. On the other hand, Morgan has 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 behind bars. The sentencing will be determined by a federal district court judge, considering the U.S. Sentencing Guidelines and other relevant statutory factors.
As per standard procedures in criminal forfeiture cases, a formal process will take place under Rule 32.2 of the Federal Rules of Criminal Procedure, allowing third-party claimants to submit claims for any seized and forfeited property after the conclusion of the case.
The couple garnered significant attention online, not only due to the audacious heist but also because of Morgan’s peculiar rap videos. She had a notable presence in the business world, writing articles about entrepreneurship for Forbes, and branding herself as the “Crocodile of Wall Street” in her rap pursuits.
Though Morgan’s days of rapping might be over, her colorful escapades may soon be adapted for a wider audience. Hulu is currently in the process of developing a limited-run television series titled “Razzlekhan: The Infamous Crocodile of Wall Street,” with Lily Collins set to star as Morgan, depicting the couple’s notorious downfall.
Information for this briefing was found via Quartz, Breaking 911, and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
