Heather Morgan, also known by her rap alias “Razzlekhan,” was sentenced to 18 months in prison by a federal court in Washington DC for her involvement in money laundering linked to the 2016 Bitfinex hack. The sentencing follows her guilty plea in August 2023 on charges of conspiracy to commit money laundering and conspiracy to defraud the United States.
Heather Morgan sentenced to 18 months for money laundering in Bitfinex hacking case
According to one recent reportHeather Morgan faced charges stemming from the laundering of Bitcoin stolen in the Bitfinex hack. Prosecutors argued that while she was not directly involved in the breach, she helped conceal and launder money for years. The stolen cryptocurrency, which was valued at $71 million in 2016, is now worth billions due to Bitcoin’s price increase.
Morgan’s role in the scheme was described as supportive, acting on instructions from her husband, Ilya Lichtenstein. She was involved in laundering smaller portions of the 119,754 stolen Bitcoin through accounts created under false identities. Consequently, her sentence was reduced to 18 months due to her cooperation with authorities and her limited role in the operation.
Furthermore, Morgan’s husband, Ilya Lichtenstein was convicted to five years in prison last week for his central role in the Bitfinex Hack. He admitted to hacking the exchange in 2016 and conspiring to launder the stolen cryptocurrency. Lichtenstein allegedly used sophisticated methods to obscure the origins of the funds, including depositing and withdrawing small amounts of money on exchanges and darknet markets.
The couple had laundered approximately 21% of the stolen Bitcoin before their arrest. As part of a plea deal, Lichtenstein cooperated with authorities, which affected the outcome of the sentencing. Both he and Heather Morgan pleaded guilty in 2023.
Judge emphasizes liability in crypto money laundering case
During the sentencing, U.S. District Judge Colleen Kollar-Kotelly emphasized the need to prevent similar crimes involving cryptocurrency theft. The court acknowledged Morgan’s remorse and cooperation, but noted the extensive planning required for the money laundering activities. The judge ruled that her actions warranted a prison sentence, even though she played a smaller role than her husband.
More so, US District Judge Colleen Kollar-Kotelly expressed concern over the increasing crypto hacks, stating:
“There seems to be a greater increase in thefts, especially around cryptocurrency.”
Consequently, the judge agreed with US prosecutors that Morgan should serve a prison sentence as a warning and to deter others from committing similar offenses.
Morgan expressed her regret for her actions and apologized in court. She admitted that she continued to assist in money laundering even after learning the money came from the Bitfinex hack.
The Bitfinex hacker’s wife said:
“I used my time and energy to do evil instead of good, and I am ashamed of that.”
The Bitfinex Hack remains one of the biggest crypto hacks to date. The stolen funds, worth $4 billion at the time of the seizure, underscore the challenges of securing digital assets. This case adds to a growing list of prosecutions related to cryptocurrency crimes.
In a recent report, another exchange, M2 Crypto Exchange Announced a $13.7 million cyberattack targeting its hot wallets. The breach affected BTC, ETH and Solana assets, prompting the exchange to refund users and improve security protocols.
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Ronny Mugendi
Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, who has contributed significantly to various media outlets on cryptocurrency trends and technologies. With more than 4000 published articles in various media, he wants to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of cycling and exploring new trails and landscapes.
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