Heather Morgan was sentenced to 18 months for laundering $4B in Bitcoin stolen during the 2016 Bitfinex hack, highlighting crypto security issues.
A federal judge in Washington, D.C., convicted Heather Morgan, better known by her rap moniker “Razzlekhan,” to 18 months in prison for her role in money laundering related to the Bitfinex hack in 2016.
She entered a guilty plea to conspiracy to defraud the United States and to launder money in August 2023, which led to the punishment.
In Bitfinex Hack Case, Heather Morgan Received 18-month Sentence For Money Laundering
According to a recent article, Heather Morgan was charged with laundering Bitcoin taken during the Bitfinex hack.
Although she was not a direct participant in the breach, prosecutors contended that she assisted in the years-long concealment and money laundering.
Since Bitcoin’s price has increased, the stolen cryptocurrency, which was worth $71 million in 2016, is now worth billions.
According to reports, Morgan played a supportive part in the plan, following her husband Ilya Lichtenstein’s directions.
Smaller amounts of the 119,754 stolen Bitcoin were allegedly laundered by her using accounts made under pretenses.
Because she cooperated with authorities and played a minimal role in the operation, her sentence was lowered to 18 months.
In addition, Ilya Lichtenstein, Morgan’s husband, received a five-year prison sentence last week for his pivotal part in the Bitfinex hack.
In 2016, he acknowledged that he had hacked the exchange and plotted to launder the cryptocurrency that had been taken.
Lichtenstein allegedly employed intricate techniques, including making little deposits and withdrawals across exchanges and darknet markets, to conceal the monies’ source.
Before being arrested, the couple laundered about 21 percent of the Bitcoin that was taken.
Lichtenstein cooperated with police as part of a plea agreement, which affected the sentence. In 2023, he and Heather Morgan entered guilty pleas.
Judge Stresses Accountability In Crypto Laundering Case
U.S. District Judge Colleen Kollar-Kotelly stressed the importance of discouraging similar bitcoin theft crimes throughout the sentencing.
Although the court recognized Morgan’s cooperation and regret, it also pointed out that the laundering operations took extensive planning.
Although she had less involvement than her husband, the judge said that her conduct still deserved prison time.
Furthermore, US District Judge Colleen Kollar-Kotelly voiced her concern about the increase in cryptocurrency breaches by saying:
“There seems to be, particularly around cryptocurrency, more of an increase in thefts.”
The judge therefore agreed with U.S. prosecutors that Morgan should be imprisoned as a warning and to discourage others from committing the same crimes.
Morgan apologized in court and that she regretted what she had done. She acknowledged that even after discovering the money was from the Bitfinex Hack, she still helped launder money.
The spouse of the Bitfinex hacker stated:
“I used my time and energy to do harm instead of good, and I’m ashamed of that.”
One of the biggest cryptocurrency attacks to date is still the Bitfinex hack.
The $4 billion in stolen money at the time of seizure highlights how difficult it is to secure digital assets.
The number of prosecutions involving cryptocurrency offenses is increasing with this case.
Another exchange, M2 Crypto Exchange, recently reported that its hot wallets were the target of a $13.7 million cyberattack.
The exchange had to compensate users and improve security measures as a result of the incident, which impacted BTC, ETH, and Solana assets.