Bitfinex Hack: Meet the Self-Proclaimed ‘Serial Entrepreneur’ Couple Charged Over Laundering Bitcoin
Ilya Lichtenstein (right). Source: Twitter.
At first, a self-proclaimed “serial entrepreneur” couple has been granted bail by a US judge for an alleged conspiracy to launder USD 4.5bn worth of bitcoin (BTC) stolen from the 2016 hack of the major crypto exchange Bitfinex.
The New York judge set bail for Morgan at USD 3m and for Lichtenstein at USD 5m. However, later, a Washington judge halted this decision to grant bail.
The couple in question are Heather Morgan, 31, a published Forbes and Inc contributor who also calls herself the “Crocodile of Wall Street”, and her husband Ilya Lichtenstein, 34, a “Web3 developer.”
Morgan appears to be a marketing entrepreneur with several bylines in prominent media outlets. According to her LinkedIn profile, Morgan has a Master of Arts degree in international economic development from the American University in Cairo, Egypt, and a Bachelor of Arts in international relations from the University of California, Davis, USA.
“I’m going to tell you my secret for making dreams a reality,” Morgan said in a TikTok video. “I started my company when I was 23 and grew it into a multimillion-dollar business with zero outside funding. I had no connections. I didn’t go to an Ivy League school and I wasn’t trust-funded. How did I do it? I learned a simple framework in Silicon Valley from some top entrepreneurs that are now billionaires that I live by. It goes like this: automate, eliminate, delegate.”
In an article, titled “Experts Share Tips To Protect Your Business From Cybercriminals,” she said that “cybercriminals and fraudsters are taking advantage of” the disruption caused by the COVID-19 pandemic, which has led “to a spike in scams and cybercrime.” She also provided some tips for businesses on how to stay safe online.
On her website, Razzlekhan — “like Genghis Khan, but with more pizzazz” — Morgan calls herself an artist, claiming that her art “often resembles something in between an acid trip and a delightful nightmare,” and that it’s “definitely not for the faint of heart or easily offended.”
She also appears to be a fan of rap and is some kind of a rapper — though not everyone is a fan of her art or rap.
This “rapper” with an alias of RAZZLEKHAN aka Heather Morgan was charged today in NYC, with being part of money laundering scheme that involved Billions worth of Bitcoin.
— Letting Go (@ProvideContext) February 8, 2022
I believe she should have already been in prison for life for whatever this is. pic.twitter.com/CwHVH4kf7y
On the other hand, Morgan’s partner Lichtenstein is a tech entrepreneur and founder of blockchain start-up Endpass, a cross-platform offline password management app that seeks to “securely store passwords” to “stop fraud and terrorism.” This product was designed to solve “problems in decentralized identity and authentication.”
He doesn’t appear to have much of a social media presence but has been active in warning others about hacks and scams.
There really should be a mandatory security tutorial with a test at the end for many crypto assets.
— Dutch Lichtenstein (@unrealdutch) January 3, 2022
The couple was arrested by federal law enforcement officials in New York City on Tuesday after officials gained access to files within an online account controlled by Lichtenstein that contained the private keys to BTC 94,000 (USD 4.1bn) that had been stolen from Bitfinex.
As per an announcement from the Department of Justice (DOJ), Bitfinex’s hacker sent BTC 119,754 to a digital wallet under Lichtenstein’s control after they managed to breach the exchange’s systems back in 2016.
“Over the last five years, approximately 25,000 of those stolen bitcoin were transferred out of Lichtenstein’s wallet via a complicated money laundering process that ended with some of the stolen funds being deposited into financial accounts controlled by Lichtenstein and Morgan,” the DOJ said.
The judge has set bail for the couple, but they are still facing a maximum of 25 years in prison, according to the DOJ.
Judge Freeman: I don't think it can happen so lightening fast. Maybe in 24 hours. So I don't have to issue a stay to allow for the appeal.
— Inner City Press (@innercitypress) February 8, 2022
For Ms. Liechtenstein [that is, Ms. Morgan] Same on co-signers, all the same but the bond is $3 million.
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Reactions:
I've been thinking the same thing.
— Mark Jeffrey (@markjeffrey) February 9, 2022
That was a Lex Luthor level crime. She's no Lex.
She's more like the Otis. https://t.co/TUd97ghlAb pic.twitter.com/vIFbKgtk4n
Why was the Bitfinex thief spending her time trying to sell marketing advice if she had $4b in BTC on standby? https://t.co/QOFmGqOOzD
— Chris Blec (@ChrisBlec) February 9, 2022
https://www.twitter.com/prestonjbyrne/status/1491267895917432832So let me get this straight.
— 🏴∴glorified accountant∴🏴 (@ErgoBTC) February 8, 2022
The guy that was using AlphaBay in 2017 to launder these coins was also keeping them in an encrypted file "in the cloud"? pic.twitter.com/wouWVDP0iY
I can't remember the last time i've been so entertained. pic.twitter.com/TAGGcotaA3
— Jason Lowery (@JasonPLowery) February 9, 2022
"lets put that private keys on google drive then spend 25k bitcoins into a bank under my real name and live outrageously lavish lifestyle in new york to not attract any attention"
— borsche (@piramida) February 9, 2022
said no hacker ever.
Jason saying this is proof that it was a psy-op. https://t.co/2BwyjZmjmX
— Seth Meister⚡️ – The Unconquered🏴☠️ (@SethZero1) February 9, 2022
If you can’t square this with her surrealist rap identity ”Razzlekhan”, read the below passage from her Forbes column.
— Eric Wall (@ercwl) February 9, 2022
What I can’t understand from CT the last couple of days is why ”Razzlekhan” is evidence against her competence. Being goofy = often strong sign of intelligence pic.twitter.com/hRMct8CNLU
re: post-mortem
— Paolo Ardoino 🍐 (@paoloardoino) February 9, 2022
This is still an ongoing investigation.
Unfortunately certain details can be disclosed only once all the event is concluded. We never lost the hope anyway.
I'm quite sure that the sauce will help people to understand better the causation of this mess.
until today i didnt think the movie trope of the hapless villain sidekicks bumbling around solely for the purposes of comic relief was real
— nic 🌠 carter (@nic__carter) February 9, 2022
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Learn more:
– US Arrests Two Suspects in Bitfinex Bitcoin Hack, Seizes USD 3.6B in BTC; LEO Skyrockets
– US Government Is Now Top Bitcoin Whale. What Could Happen Next?
– Crypto Security in 2022: Prepare for More DeFi Hacks, Exchange Outages, and Noob Mistakes
– CFTC Fines Tether For Lying & Bitfinex For ‘Illegal’ Transactions
– North Korea Still Hacking Crypto Exchanges to Fund Its Weapons Program, Says UN
– The 4th Largest Crypto Theft Shows DeFi Weakness as Hacker Nets USD 325M in a Wormhole
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(Updated at 14:20 UTC to add that a Washington judge halted the decision to grant bail.)
