Key Takeaways
- The couple used techniques including creating fake identities to cover their tracks
- Lichtenstein eventually admitted to committing the heist while his wife pleaded guilty to one count of money laundering conspiracy
Ilya “Dutch” Lichtenstein, the architect of the 2016 Bitfinex Bitcoin heist, has been sentenced to five years in prison. His wife Heather Morgan, a self-styled rapper known as “Razzlekhan,” has been sentenced to 18 months in prison.
The sentencing of Lichtenstein closes the chapter on a meticulously orchestrated hack that saw 119,754 BTC—then worth $70 million and now valued at a staggering $4 billion—siphoned from the exchange. Reportedly, Lichtenstein and his wife, Heather Morgan used various techniques to cover their tracks, including creating fake identities, transferring small sums, and using crypto exchanges and darknet markets. The couple even went on to lengths purchased NFTs, gold, and Walmart gift cards with the funds.
The couple was arrested in early 2022. Lichtenstein eventually admitted to committing the heist while his wife pleaded guilty to one count of money laundering conspiracy along with another count of conspiracy to defraud the US.
The judge noted that he moved Bitcoin to his own wallet and, with his wife’s help, he laundered the funds. The funds were eventually withdrawn, converted to other crypto, depositing a chunk of the ill-gotten assets into crypto mixing services like Bitcoin Fog, converting them to fiat currency and moving to a U.S. bank account, and exchanging a portion of the crypto for gold coins. Crypto mixing services obscure the origin and destination of funds, making it difficult to trace transactions.
A misstep involving a stolen Bitcoin purchase led investigators to Lichtenstein and his wife, Heather Morgan, who later admitted to laundering part of the proceeds. While Lichtenstein faced a potential 20-year sentence, his cooperation with authorities in recovering the bulk of the funds earned him a reduced sentence.
The latest development comes amid Bitfinex Securities introducing tokenized U.S. Treasury bills, or USTBL. This marks the first instance of tokenized T-bills under a regulated framework built on Bitcoin’s Liquid Network. The initiative, running from November 19 to 29, aims to raise $30 million, with an expected annual yield of 5.02%. Token holders will benefit from instant settlement, wallet integration, and secondary market trading.
