US couple accused of laundering billions worth of bitcoin stolen from 2016 hack of virtual currency exchange Bitfinex has entered into a plea agreement, according to court records mentioned By Reuters.
Heather Morgan, who used the hip-hop pseudonym “Razzlekhan” to post her music online, and her husband, Elijah Lichtenstein, were arrested earlier this year and are scheduled to appear at a hearing Aug. 3 before Chief Justice Colin Kollar-Kotelly in Washington.
Bitcoin laundered exceeds $4.5 billion
Elijah Lichtenstein and Heather Morgan, both New York residents, are facing charges of allegedly conspiring to launder the proceeds of 119,754 bitcoins (BTC) stolen from Bitfinex in 2016.
After the hacker breached the platform’s systems and initiated more than 2,000 unauthorized transactions, the stolen bitcoins were transferred to a digital wallet controlled by Liechtenstein.
Over the course of five years, approximately 25,000 stolen bitcoins were moved from Liechtenstein’s wallet through an elaborate money laundering operation, which eventually led to some of the stolen money being deposited into financial accounts controlled by the pair.
More than 94,000 bitcoins, the remainder of the stolen funds, were left in the wallet used to receive and store illegal proceeds from the hack.
However, after executing court-authorized search warrants for online accounts controlled by Lichtenstein and Morgan, the special agents accessed files in an online account controlled by Lichtenstein.
These files contained the private keys required to access the digital wallet that directly received the stolen funds from Bitfinex, enabling law enforcement to legally seize and recover more than 94,000 bitcoins, valued at more than $3.6 billion at the time of the seizure.
According to the criminal complaintLichtenstein and Morgan used various sophisticated laundering techniques, including creating online accounts using fictitious identities, automating transactions using computer software, depositing stolen funds into accounts on virtual currency exchanges and dark markets, converting Bitcoin into other forms of virtual currency, and using business accounts in the United States to legitimize their banking.
While Bitcoin was worth $71 million at the time of the hack, it was up more than $4.5 billion at the time they were caught earlier this year. Prosecutors are now seeking to forfeit about $3 billion worth of assets, including cash from bank accounts and tokens from cryptocurrency wallets.
In addition, prosecutors are seeking forfeiture of the couple’s gold coins that were “excavated and recovered by law enforcement” from an unknown location in California.
At the moment, Bitcoin remains the largest cryptocurrency in the market, based on trading volume and capitalization. It is currently trading at $29,860, which is relatively stable compared to the previous 24 hours, with a slight increase of 0.5%.
Featured image from Unsplash, chart from TradingView.com