Federal authorities have arrested a DeFi investor and his finance influencer wife for allegedly having laundered billions of dollars in cryptocurrency stolen from a crypto exchange.
The feds accuse Manhattan duo Ilya Lichtenstein, 34, and Heather Morgan, 31, of using a “labyrinth of cryptocurrency transactions” to launder $US4.5 billion (around $6 billion) stolen from Bitfinex, a Virgin-Islands-based exchange that was hacked several years ago.
In 2016, a hacker compromised Bitfinex’s systems and made over 2,000 unauthorised transactions, sending money from the exchange to a digital wallet that was later found to belong to Lichtenstein. Officials say that, over the past five years, some 25,000 bitcoin have been transferred from the wallet, and that some of those funds have ended up in “financial accounts controlled” by the couple. The remainder of the funds — over 94,000 bitcoin — stayed in the wallet.
Federal agents recently executed a search warrant that allowed them to search through the couple’s online accounts. There, they found files containing the private cryptographic keys to the illicit crypto wallet in question, the DOJ claims. As a result, agents seized the remaining 94,000 bitcoin, valued at some $US3.6 billion (around $5 billion) — the largest ever financial seizure in history, according to the agency.
The couple allegedly used a variety of tactics to hide their activities, including the use of fake online identities and the washing of funds through darknet marketplaces, officials say. According to the Justice Department, the couple ultimately conspired to launder proceeds from 119,754 stolen bitcoin, a sum valued at several billion dollars.
“In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions,” said Deputy Attorney General Lisa O. Monaco. “Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter what form it takes.”
According to a LinkedIn page matching Lichtenstein’s description, he describes himself as an “early stage angel investing in founders and decentralised projects” who is “interested in the changing nature of work, automation, autonomous networks and trustless computing.”
Morgan, meanwhile, owns a company called Salesfolk, which specialises in “email copywriting.” She also appears to be something of a financial influencer, making videos about business and wealth via social media. “Serial entrepreneur & SaaS investor. Writer, rapper &artist w/ synesthesia,” reads her TikTok, @heatherreyhan. In multiple videos, Morgan describes how she “built a multimillion dollar business” in her twenties with “ZERO outside funding.”
She also apparently has something of a music career. Going by the rap moniker “Razzlekhan,” or RZK, Morgan is a verified artist on Spotify, where she describes herself as creating “sexy horror-comedy raps with an authentically awkward twang.” Her website mystifyingly dubs her the “infamous Crocodile of Wall Street” and claims her music seeks to conjure something “between an acid trip and a delightful nightmare.” She has produced a number of singles, such as “Versace Bedouin,” for which there are also music videos on her YouTube:
In the video, Morgan dances around Wall Street, and later lounges in what looks like a hookah bar while dressed in middle eastern garb. Notably, one of the lyrics of the song is: “The Versace bedouin, Come real far but don’t know where I’m headed.” The answer to that question: federal court. Lichtenstein and Morgan face charges for money laundering and conspiracy to defraud the U.S. and, if convicted, could spend up to 25 years behind bars.