Razzlekhan and husband guilty of $4.5bn Bitcoin launder https://t.co/RPUTE3Y0oY
— The Cyber Security Hub™ (@TheCyberSecHub) August 4, 2023
They aren’t Bonnie & Clyde — they’re J.J. Caucus (Doonesbury) and Zeke Brenner. Cartoon characters.
Sketch AF, as the youngs say. Per NYMag, “An Unexpected Twist in the Saga of the Rapping Crypto Couple”:
When Heather Morgan and Ilya Lichtenstein were arrested in February 2022 for allegedly trying to launder billions of dollars of bitcoin stolen in the mysterious Bitfinex hack of 2016, most of the attention in the case gravitated toward Morgan’s subpar rapping alter ego, Razzlekhan, and the massive internet footprint that came with it. But the arrests also gave some clues as to who pulled off the Bitfinex hack, the largest heist in crypto history.
According to the Feds, Morgan and Lichtenstein had access to the funds from the heist roughly six months after they were stolen from the Hong Kong–based exchange. But many observers weren’t sure if Lichtenstein and Morgan could have pulled off the heist itself. After all, they were able to launder only a tiny fraction of the 119,000 bitcoin stolen in the phishing attack. And they were never the savviest of alleged criminals: When the Feds raided their Wall Street apartment, they found a burner phone in a bag labeled burner phone…
In the hearing, Lichtenstein also explained many of the suspect trips he took to eastern Europe and central Asia shortly prior to his arrest. According to CNBC, Lichtenstein, who was born in Soviet Russia, traveled to Ukraine and Kazakhstan to convert crypto to cash via Russian and Ukrainian proxies. The money was then shipped to Russia and Ukraine, where Lichtenstein picked it up and deposited it into his American bank account. It was in Kazakhstan that Morgan says she became suspicious of her husband’s finances. While they were purportedly on a working vacation, she saw him burning documents in a trash can. “When I asked him about it, he was evasive,” Morgan said…
The Washington Post is more expansive:
Shockwaves rippled through the cryptocurrency world in the summer of 2016 when 119,754 bitcoin, worth around $71 million at the time, disappeared from the digital coffers of the Hong Kong-based exchange Bitfinex through thousands of unauthorized transactions. Over the next half-decade, that crypto cache exploded in value, reaching the billions — yet the identity of the mastermind behind one of the largest heists in crypto history remained a mystery.
That is until Thursday, when tech entrepreneur Ilya “Dutch” Lichtenstein admitted in federal court to hacking Bitfinex seven years ago…
Court documents describe how Lichtenstein on Aug. 2, 2016, employed a slew of advanced hacking tools and techniques to purloin 119,754 bitcoin, or more than half of Bitfinex’s inventory at the time, in under four hours. According to prosecutors, Lichtenstein transferred the coins to a cryptocurrency wallet under his control through more than 2,000 transactions and then covered his tracks by deleting the access credentials in Bitfinex’s network.
What happened next was the financial equivalent of stealing a pumpkin and having it suddenly turn into a magical horse carriage. At the time of the hack, bitcoin’s value hovered around $600 — but the price skyrocketed over the years, reaching a peak of more than $68,000 in 2021. As the money grew, the couple attempted to launder it by funneling the funds into dark-net marketplaces, converting the bitcoin into other forms of cryptocurrency, opening accounts under false names and moving the stolen funds in thousands of small-sum transactions to avoid detection, according to prosecutors.
A tiny amount of the funds was also spent on non-fungible tokens (NFTs), as well as a Walmart gift card and payments to Uber, Hotels.com and PlayStation, according to a criminal complaint.
During Thursday’s plea hearing, prosecutors said Lichtenstein had used the assets to buy gold coins, which Morgan helped bury in California, Reuters reported. The two also traveled to Ukraine and Kazakhstan to meet with middlemen to convert the bitcoin into cash, which was then shipped to addresses in Russia and Ukraine and subsequently picked up to be deposited into American accounts, prosecutors said.
The couple’s activities in Ukraine “at times appear pulled from the pages of a spy novel,” prosecutors wrote in a court filing last year — and they “appear to have been setting up a contingency plan for a life in Ukraine and/or Russia prior to the COVID-19 pandemic.”…
Since there were stories last fall that Lichtenstein’s trial would involve “classified national security information“, I personally suspect he was at the very least getting some useful hacking advice from the professionals in Mother Russia. But maybe he just wandered into a top-level geopolitical situation haplessly?
The Bitfinex hackers are on trial but have had their trial moved due to the Trump indictment.
One of the hackers, Razzlekhan, is an amateur rapper.
She allegedly stole $4.1 billion.
This is her (turn on sound please): pic.twitter.com/03PXJyR49N
— unusual_whales (@unusual_whales) August 3, 2023
Yeah, I’m not buying it, either.
— Bitfinex’ed 🔥🐧 Κασσάνδρα 🏺 (@Bitfinexed) August 5, 2023