Ilya Lichtenstein admits to 2016 Bitfinex hack while entering guilty plea to money laundering charges
He and his wife, Heather Morgan, had been charged with money laundering in connection with the hack but were not known to be directly responsible for it until Lichtenstein's admission in court.
A New York man, Ilya “Dutch” Lichtenstein, has admitted to the 2016 Bitfinex hack while entering his guilty plea to charges of money laundering associated with the hack. His confession on Thursday has shed light on a $4.5 billion cyber heist that remained anonymous until now.
Lichtenstein’s plea hearing took place in Washington, D.C., federal court, with his wife, Heather Rhiannon Morgan, awaiting her own plea hearing in the audience at press time. The couple was suspected of being involved in laundering the stolen funds, but until now, their direct involvement in the original hack was not known.
Six years on the run
Arrested in February 2022, Lichtenstein and Morgan were initially tied to more than 94,000 Bitcoin (BTC)of the over 119,000 Bitcoin stolen from the cryptocurrency exchange Bitfinex. These funds were valued at about $3.6 billion at the time of seizure, marking the largest seizure in Department of Justice (DOJ) history. The total value of the stolen Bitcoin, initially worth $70 million, skyrocketed to $4.5 billion due to the volatile cryptocurrency market.
The couple, however, was not charged directly in connection to the hack. Instead, they were implicated in an intricate money laundering process, through which approximately 25,000 of the stolen Bitcoin were shifted out of Lichtenstein’s wallet into financial accounts controlled by the couple.
Lichtenstein, a Russian emigre, has been in custody without bond since his arrest, deemed a flight risk by the court. His guilty plea to a charge of conspiracy to commit money laundering comes with the agreement to cooperate with federal investigators.
Meanwhile, Morgan, who has adopted the rapper monikers “Razzlekahn” and “The Crocodile of Wall Street,” had been free on a $3 million bond since her arrest. In their first encounter in over a year, Lichtenstein smiled and blew a kiss at his wife during the court hearing.
Details emerged about the couple’s complex financial dealings during his plea hearing. This included converting assets to gold coins, buried at a location now known to law enforcement, and an international network of middlemen used to convert digital assets to cash.
Further investigations revealed that Lichtenstein, in collaboration with Morgan, had been conducting a series of small, complex transactions across multiple accounts and platforms since 2017 to obscure the path of the stolen funds. The couple also allegedly used their company, Endpass, to launder the stolen funds, misrepresenting the nature of payments into the company’s account.
The unraveling of this unprecedented cybercrime has sparked considerable interest, with Netflix commissioning a series about the couple.