A TikTok rapper and her husband have been charged with conspiring to launder $4.5bn worth of cryptocurrency stolen from a virtual currency exchange in 2016 in the biggest crypto heist the world has ever seen.
Heather Morgan, 31, and Ilya’ Dutch’ Lichtenstein, 34, both of New York, New York, were arrested in Manhattan on Tuesday.
The couple is accused of conspiring to launder the proceeds of 119,754 bitcoin swiped from Bitfinex’s platform after a threat actor accessed the exchange’s IT systems and executed more than 2,000 unauthorized transactions.
Court documents allege that the bitcoin stolen via the fraudulent transactions was sent to a digital wallet controlled by Lichtenstein.
“Over the last five years, approximately 25,000 of those stolen bitcoin were transferred out of Lichtenstein’s wallet via a complicated money laundering process that ended with some of the stolen funds being deposited into financial accounts controlled by Lichtenstein and Morgan,” said the US Department of Justice in a statement.
“The remainder of the stolen funds, comprising more than 94,000 bitcoin, remained in the wallet used to receive and store the illegal proceeds from the hack.”
While executing search warrants of online accounts under Lichenstein’s control, special agents found files containing the private keys that unlocked the digital wallet into which the funds thieved from Bitfinex had been transferred. Agents used the keys to recover more than 94,000 of Bitfinex’s stolen bitcoin valued at over $3.6bn when they were seized.
The laundering techniques allegedly used by Morgan and her husband were sophisticated. They included using computer programs to automate transactions so that many transactions could take place quickly, depositing the stolen funds into accounts at multiple virtual currency exchanges and darknet markets and then withdrawing the funds to obfuscate the money trail.
Both defendants are charged with conspiracy to commit money laundering and conspiracy to defraud the United States. If convicted on both charges, Morgan and Lichtenstein could each be sentenced to a maximum of 25 years in prison.
Assistant attorney general Kenneth Polite said the case brought against Morgan and Lichtenstein showed that federal law enforcement “can follow money through the blockchain.”
