Bitfinex Hacker's Wife Sentenced to 18 Months in Prison for Money Laundering

The court in Washington D.C. has sentenced Heather Morgan to 18 months in prison for her role in money laundering related to the 2016 Bitfinex hack.

Morgan, also known by her rap artist name "Razzlekhan," pleaded guilty in August to conspiracy charges related to money laundering and defrauding the U.S. government.

Both perpetrators in the Bitfinex hack have been arrested

District Court Judge Colleen Kollar-Kotelly sentenced Morgan this morning, November 18. She was arrested in 2022 along with her husband in Manhattan. When the trial began, Morgan faced at least 5 years in prison for multiple money laundering charges. However, she received an earlier sentence this morning due to her active cooperation with prosecutors.

"The U.S. Department of Justice has a new legal theory for arresting money launderers: charging them with 'conspiracy to defraud FinCEN.' And it was used for the first time in the case against the cryptocurrency hackers Ilya Lichtenstein and Heather Morgan,"

financial historian John Paul Koning wrote on X (formerly Twitter)

Morgan's husband, Ilya Lichtenstein, was the mastermind behind the theft of 119,754 Bit, worth nearly $10 billion at current prices. Although Morgan did not participate in the Bitfinex hack, she helped Lichtenstein conceal the stolen cryptocurrency. Prosecutors described how the couple used fake identities, made small transfers, and used multiple cryptocurrency exchanges to hide the origin of the money. They also purchased Non-Fungible Tokens, gold, and gift cards with the stolen Bit from Bitfinex.

According to a Bloomberg report, Morgan was able to launder only 21% of the stolen Bit. She also conducted numerous transactions with the Bitfinex funds on the dark web to continue concealing the trail.

Earlier this week, Lichtenstein was also sentenced to 5 years in prison. However, this sentence is significantly lower than the maximum of 20 years, as he also cooperated extensively with the authorities. Cooperation and a lack of a criminal record played a crucial role in reducing his sentence.

The 2016 Bitfinex hack remains one of the largest cryptocurrency thefts in history. Hollywood is expected to turn the event into a film, 'Dutch & Razzlekhan', with Chloë Grace Moretz playing the role of Morgan. The film will explore the couple's transformation from young entrepreneurs to convicted criminals, with Lewis Pullman and Ariana DeBose also in the cast.

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