Bitfinex Hacker’s Wife Sentenced to 1.5 Years for Money Laundering

Heather “Razzlekhan” Morgan has been sentenced to 1.5 years in prison for her involvement in laundering funds stolen from the Bitfinex cryptocurrency exchange in 2016. Her husband, Ilya “Dutch” Lichtenstein, the mastermind behind the theft of nearly 120,000 BTC, had previously received a five-year prison sentence.

According to authorities, the couple laundered approximately 20% of the stolen funds. At the time of their arrest, the U.S. government reported that the perpetrators had attempted to launder $4.5 billion in stolen Bitcoin, of which $3.6 billion was recovered—marking the largest financial seizure in history. Later, an additional $1 billion linked to the Bitfinex hack was confiscated.

Morgan and Lichtenstein were apprehended in February 2022. Lichtenstein admitted to orchestrating the theft, while Morgan pleaded guilty to two charges: conspiracy to launder money and conspiracy to defraud the U.S. government. As previously stated, the couple agreed to cooperate with American law enforcement.

Despite Morgan’s claims that she only learned of the crime after it had occurred, investigators accused her of actively concealing the origins of the illicit funds. Methods cited included transactions on dark markets, “hopping” between cryptocurrencies, using mixers to anonymize transactions, converting assets to gold coins, and legitimizing funds through bank accounts.

Relatives and friends of Morgan, including some from Dubai and Hong Kong, attended the court proceedings, appealing for leniency and emphasizing her sincere remorse. The judge acknowledged Morgan’s substantial support network and noted that her role was less significant compared to her husband’s. However, the judge stressed that the sentence must serve as a warning to the cryptocurrency sector, which often becomes a haven for illegal activities.

Morgan’s defense argued for limiting her sentence to time already served under house arrest and 17 days in jail, citing the damage to her reputation, which, according to her attorney, had been exacerbated by her persona as rapper “Razzlekhan.” The prosecution, however, underscored Morgan’s active participation in criminal activities, referencing instances where she personally buried gold coins acquired with stolen funds.

During the hearing, Morgan broke down in tears, expressing profound regret for her actions. She stated that the consequences of her choices would haunt her for the rest of her life. Later that day, Morgan released a video message, promising to share her story in greater detail soon. The court granted her an extension until the end of January to begin serving her sentence, with the exact date yet to be determined.