For his part in laundering billions of stolen cryptocurrencies, a well-known hacker has been sentenced to five years in a U.S. jail. Last year, Ilya Lichtenstein, who entered a guilty plea, admitted to hacking the Bitfinex bitcoin exchange in 2016, underlining the loss of around 120,000 bitcoins. This bitcoin was valued at roughly $70 million (£55.3 million at the time, but by the time Lichtenstein was arrested, it had skyrocketed to almost $4.5 billion. Today, this would be worth more than twice that price.
Lichtenstein executed this intricate plan with his wife, Heather Morgan, who promoted her hip-hop songs under the nickname “Razzlekhan.” Her colorful rap character, “The Crocodile of Wall Street,” went viral and gave the case yet another level of notoriety.
What Was the Largest Financial Seizure in D.O.J. History?
In connection with the case, the U.S. Department of Justice (D.O.J.) took assets valued at $3.6 billion, the highest amount the department has ever taken. “It’s important to send a message that you can’t commit these crimes with impunity,” Deputy Attorney General Lisa Monaco said at the time, stressing the need for penalties for such acts.
Court filings claim Lichtenstein broke into Bitfinex, one of the biggest Bitcoin exchanges, using “advanced hacking tools and techniques.” After effectively breaching the platform, Lichtenstein got his wife to launder the pilfers.
According to the D.O.J.’s statement, the couple “employed numerous sophisticated laundering techniques,” including forging false identities, swapping money between several cryptocurrencies, and even buying gold coins to further hide the funds’ path.
Did Lichtenstein Show Remorse and Have Plans to Combat Cybercrime?
Lichtenstein has been incarcerated since his February 2022 arrest. At the sentencing, he admitted the damage done and greatly regretted his actions. Indicating a wish to help in the future, he said he planned to use his talents to fight cybercrime following his sentence.
Presiding over the matter, District Judge Colleen Kollar-Kotelly underlined the need to prevent such large-scale crimes in the future. “It’s crucial to convey that you cannot commit these crimes with impunity,” she said. “There are ramifications for them.”
Morgan, who entered a guilty plea last year to one count of conspiracy to commit money laundering, is awaiting sentence—November 18.
How Did Lichtenstein and Morgan Execute a Sophisticated Laundering Network?
Court records detail how Russian-born U.S. citizen Lichtenstein painstakingly created and carried out a clever scheme to hide the source of the money pilfers. He visited couriers to transfer laundered assets and physically shift money into different cryptocurrencies. Prosecutors said he regularly planned these encounters using family vacations to arrange transportation for the laundered money back to his house.
Who Was "Razzlekhan," and How Did She Go Viral?
The case took an unexpected turn with Morgan’s rap identity, Razzlekhan, whose sharp lyrics and vibrant music videos immediately shot viral. Morgan kept creating movies full of strong assertions and confident bravado while officials were closing in on the couple. In one song, she called herself a “bad-ass money maker” and “the crocodile of Wall Street.”
Her songs, often loaded with expletives, gave the case a degree of arrogance. She was unconcerned with the continuous criminal inquiry, even shooting her music videos at well-known New York sites. Her public appearances and remarks went viral on social media, giving the case a degree of exposure hardly found in well-known financial crimes.
How Did Morgan Balance Her Double Life as a Business Influencer?
Morgan developed her public reputation with pieces written in Forbes, where she claimed to be a successful technology entrepreneur. Presenting herself as an “economist, serial entrepreneur, software investor, and rapper,” she seemed to have a life of reasonable financial success. As specifics of her participation in the case surfaced, her dual persona as a businesswoman and “Razzlekhan” rapper captivated and startled the public.
