30s Summary

US prosecutors recommend an 18-month sentence for Heather Morgan, aka rapper “Razzlekhan,” for aiding in the laundering of 120,000 Bitcoin stolen from Bitfinex in 2016. Morgan, who had limited involvement in the crime, was instrumental in the plea deal made by her and husband Ilya Lichtenstein, the main culprit. Morgan pled guilty to money laundering and fraud, and could face up to 10 years in prison. Lichtenstein admitted to hacking Bitfinex and could face 20 years in prison. Prosecutors also seek to seize crypto assets worth over $6 billion from the couple as payback to Bitfinex. Sentences will be finalised in mid-November.

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Prosecutors in the US want to put Heather Morgan, also known as rapper “Razzlekhan,” behind bars for a year and a half. She played a role in helping clean up a whopping 120,000 Bitcoin, swiped from crypto exchange Bitfinex back in 2016.

In an official document dated Oct. 9, the authorities requested that Morgan gets a bit of a break when it comes to her sentence mainly because she was a great help during her and her hubby Ilya Lichtenshtein’s plea deal in July 2023. They also figured that Morgan wasn’t really a key player in the crime compared to Lichtenstein, and only used a tiny amount of what the duo ended up stealing.

Morgan admitted to money laundering and fraud charges in August 2023 for her part in making the stolen Bitcoin (BTC) look clean, which if you try to sell today would fetch you about $7.2 billion. If convicted, she could be looking at spending a total of 10 years in the slammer.

Initially, folks thought that Morgan and Lichtenstein were only guilty of helping clean up after the 2016 Bitfinex hack. Plot twist though, Lichtenstein then admitted to being the hacker and laundering the money. He’s pled guilty to scheming to commit laundering and now could be going away for 20 years.

The prosecutors said that Morgan didn’t know how Lichtenstein got his hands on the 120,000 BTC at first. But early in 2020, he told her that he was the mastermind behind the hack, and she became his partner in crime by helping him clean the funds and hide his part in the job. The prosecutors claimed in the document, “Morgan consciously chose to do illegal stuff, helping her hubby launder millions in stolen money for their personal enjoyment.”

They made it clear that this wasn’t just a bad decision she made on a whim, she knew what she was doing and took part in the illegal stuff over the course of several years.

Both Morgan and Lichtenstein used some really high-tech methods to cover their tracks while cleaning the stolen BTC, according to the prosecutors. This includes using crypto exchanges that don’t follow rules, darknet markets, and crypto mixers.

It was also revealed that Morgan used some of the stolen funds to buy physical gold coins, which she hid in a secret spot. The good news for the authorities is she’s since revealed where this secret spot is.

To add to Morgan’s 18-month sentence, the prosecutors want her to give back the crypto assets taken by the government from the “Bitfinex Hack Wallet” as a payback to Bitfinex. This wallet holds roughly 95,000 BTC, 117,400 Bitcoin Cash (BCH), 117,400 Bitcoin Satoshi Vision (BSV) and 118,100 Bitcoin Gold (BTG) — which is worth more than $6 billion.

The final decision on Morgan’s sentence will be revealed on Nov. 15. The day before, Lichtenstein will find out how long he’ll be serving.

Source: Cointelegraph