- Government has seized $4B from their accounts since February 2022
- Couple deposited the stolen funds into darknet market accounts and exchanges
- They face a collective three decades in prison
Ilya Lichtenstein, 35, and Heather Morgan, 33, from New York City pleaded guilty to money laundering conspiracies, hacking, and stealing approximately 120,000 Bitcoin from global crypto exchange Bitfinex in 2016, the US Department of Justice reported.
Government has seized $4B since February 2022
The couple was arrested in February last year after government officials seized around 95,000 of the stolen Bitcoin from cryptocurrency wallets they controlled. At that time, the value of the recovered funds was around $3.6 billion. The government has seized another $475 million connected to the hack since then.
Lichtenstein has admitted to using several advanced hacking techniques and tools to access Bitfinex’s system. He authorized more than 2,000 transactions fraudulently, transferring 119,754 Bitcoin to a cryptocurrency wallet he controlled. Then, he deleted access info to cover his tracks, making his actions undetectable to law enforcement.
After the hack, his wife helped him launder the stolen funds.
Complex tools and techniques used
Lichtenstein, at times assisted by Morgan, used computer programs to automate transactions and fake identities to set up online accounts. He deposited the stolen funds into various darknet market accounts and cryptocurrency exchanges and then withdrew them, thus disrupting the flow of funds to conceal the transaction history.
He exchanged Bitcoin for other cryptocurrencies, including anonymous cryptocurrency in a practice known as “chain hopping.” He deposited part of the stolen funds into cryptocurrency mixers such as Helix, Bitcoin Fog, and ChipMixer. Finally, he used US-based business accounts to make his activities seem legitimate and exchanged some of the stolen funds into physical gold, which Morgan buried.
Husband faces 20 years in prison, Morgan – 10
Lichtenstein pleaded guilty to conspiring to commit money laundering. The maximum sentence for this crime is 20 years in prison. Morgan pleaded guilty to conspiring to commit money laundering and conspiring to defraud the US government. Each crime carries a maximum sentence of five years in prison.
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