A hacker involved in one of the largest cryptocurrency thefts, Ilya Lichtenstein, has been sentenced to five years in prison in the United States for laundering the stolen funds.
Lichtenstein, who had been in custody since his arrest in February 2022, pleaded guilty last year to his role in hacking the Bitfinex cryptocurrency exchange in 2016.
The hack, which involved the theft of nearly 120,000 bitcoins, was initially valued at around $70 million (£55.3 million) at the time of the crime.
However, by the time Lichtenstein and his wife, Heather Morgan, were arrested, the value of the stolen cryptocurrency had surged to an astounding $4.5 billion.
The case marked a significant milestone in the Department of Justice’s efforts to combat cybercrime.
Deputy Attorney General Lisa Monaco hailed the recovery of $3.6 billion in assets, calling it the largest financial seizure in the history of the DOJ.
“It’s important to send a message that you can’t commit these crimes with impunity, that there are consequences to them,” said district judge Colleen Kollar-Kotelly during the sentencing.
Lichtenstein, born in Russia but raised in the US, expressed deep remorse for his actions during his court appearance.
“I regret my involvement in these crimes and the harm it has caused,” he said. Looking toward the future, Lichtenstein stated that he hoped to use his skills in cybersecurity to help fight against cybercrime after serving his sentence.
His wife, Heather Morgan, who used the alias “Razzlekhan” to promote her hip-hop music, also pleaded guilty to conspiracy to commit money laundering last year.
Morgan, who was involved in laundering the stolen funds, has become a viral figure due to her eccentric public persona. She is set to be sentenced on November 18.
According to court documents, Lichtenstein used a range of sophisticated hacking tools and techniques to breach Bitfinex’s security.
After stealing the bitcoins, he turned to Morgan for help in laundering the proceeds. The couple employed a variety of techniques to disguise the origin of the funds, including creating fake identities, converting the stolen bitcoins into other cryptocurrencies, and purchasing gold coins to obscure the trail.
They even traveled together, meeting couriers during family trips to move the laundered funds back to the US, prosecutors revealed.
Despite their efforts to cover up the crime, Morgan’s Razzlekhan persona, which she created to promote her music, became widely known after the case was revealed.
In her rap lyrics, she portrayed herself as a “bad-ass money maker” and “the crocodile of Wall Street.” Morgan’s social media presence, filled with expletive-laden music videos filmed in various New York locations, only added to the couple’s bizarre attempts to remain in the public eye.
She also made numerous claims about her success in the tech industry, including articles in Forbes, where she described herself as an “economist, serial entrepreneur, software investor, and rapper.”
While the couple’s criminal enterprise has been dismantled, the saga of their heist and subsequent attempts to flaunt their wealth and influence continues to capture public attention.
Morgan’s sentencing is scheduled for later this month, but Lichtenstein’s five-year sentence serves as a stark reminder of the high price of cybercrime.
