Law enforcers have found the people who laundered stolen billions from a cryptocurrency exchange. Who are they?
The most talked about topic in the cryptocurrency world this week was the seizure of $3.6 billion in Bitcoin from funds stolen during a hacking attack on the Bitfinex exchange in 2016. It turns out that the funds wanted to be laundered – and were already doing so successfully. The perpetrators were a married couple with a very interesting background. We tell you more about the situation. And we also show them the bad guys.
Traditionally, we start with an explanation. The hacking of the Bitfinex cryptocurrency exchange was one of the major events of 2016 for the blockchain world. At the time, criminals stole 119,756 BTC from the Hong Kong-based platform. As of the day of the hack, the amount was the equivalent of $67.47 million, but as Bitcoin has grown impressively over the years, the amount has increased significantly.
Naturally, the stolen funds were actively monitored because of the transparent blockchain. For example, here is an April 2021 report of $78 million in BTC stolen in 2016.
⚠ ⚠ ⚠ ⚠ ⚠ ⚠ ⚠ 1,241.37 #BTC (78,246,494 USD) of stolen funds transferred from Bitfinex Hack 2016 to unknown wallethttps://t.co/yLsJDXUBvE
– Whale Alert (@whale_alert) April 14, 2021
However, the last time money was moved was on February 1, 2022, when 94,630 BTC were sent. As Glassnode analysts noted, this turned out to be the largest Bitcoin interaction in five years. The previous record from January 2019 was the equivalent of 71.8 thousand bitcoins. Here’s the corresponding graph.
Although the amount stolen turned out to be huge, the hackers in this case weren’t particularly worried about security. That’s why they were eventually found.
The outcome of the Bitfinex cryptocurrency exchange hack
According to Decrypt, Heather Morgan and her husband Ilya Lichtenstein are behind the money laundering attempt. It would seem that the task of finding and arresting them should be very difficult, as criminals “working” with such large sums of money are usually carefully hidden. But not these two.
Morgan has a long history of trying to become a blogger, an influencer, a rapper and simply a celebrity on the internet. For the most part, these attempts border on trivial freakery. Crypto-enthusiasts have ‘dug up’ some of her videos, including TikTok videos. They are now actively tweeting them out.
For example, here’s a post from Heather’s TikTok in which she admits to stealing $4.5 billion in Bitcoin. As the cryptocurrency industry joked, all the authorities had to do to solve the crime was look at the social network in question.
All the government had to do was look on TikTok 🤦♂️ pic.twitter.com/UYrSayWZOq
– bill spacman 🐿 (@BillSPACman) February 8, 2022
The couple’s story has become a good base for new memes. Here’s a edited video of how law enforcement allegedly investigated the case. The basis for the video was Heather’s numerous videos from her blog, where she actively sang, among other things.
feds catching the bitfinex hacker pic.twitter.com/9XZX79GHbp
– Cryptofungus (@Cryptofung) February 9, 2022
By the way, Heather even has her own website dedicated to her alter ego under the pseudonym Razzlekhan in the rap world. The site explains that “just like her fearless entrepreneurial spirit and hacker mentality, Razz unabashedly explores new frontiers of art.
According to Morgan’s LinkedIn profile, she is a “serial entrepreneur, investor and surrealist”. The profile notes that she has a bachelor’s degree in economics from the University of California, Davis. Morgan has also tried her hand as a journalist, publishing articles for Inc and Forbes, where she has written about everything from insights to influencer strategies and, ironically, how to “protect your business from cyber criminals”.
Here’s a clip of an example of a rap that Morgan read.
🥴 https://t.co/1eOVCpg31j pic.twitter.com/iNHuK3tzJ6
– Will Gottsegen (@lil_smush) February 8, 2022
And here’s the full-length music video for the singer’s song.
As Avalanche creator Emin Gun Sierer pointed out, if the accusations are true, Morgan was already a billionaire when these videos were recorded.
If the accusations are true, she was a billionaire when these videos were recorded. https://t.co/7y6pGyxbk1
– Emin Gün Sirer🔺 (@el33th4xor) February 8, 2022
Her Instagram account is a collection of photos of her life in New York. There’s also a photo with her husband Lichtenstein.
According to law enforcement authorities, the bitcoin owners spent it to buy gold and unique NFT tokens. In this way, they were trying to funnel the funds into the white part of the crypto-economy. However, in the end, the plan failed.
The Department of Justice has yet to prove in court its allegations that Morgan laundered $4.5 billion in bitcoins stolen from Bitfinex in 2016. If the suspect is indeed guilty of the charges, her lifestyle will change dramatically. She and Lichtenstein face a maximum sentence of 20 years in federal prison on money laundering charges, plus another five years for conspiracy to defraud the US government.
We think this situation will have a good impact on the future of the coin niche. Although this hack was a nasty incident in the history of digital assets, the perpetrators were still found. Which means more and more people are now realising that stealing other people's money within transparent blockchains is not a good idea. So there will probably be fewer cases like this as a result.
You will find even more interesting stories about crypto in our Millionaires’ Crypto Chat. There, we’ll also talk about more unusual topics that arise in the digital asset space.