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US Couple Arrested For Laundering $4.5 Billion In Bitcoin Tied To 2016 Hack

Heather Morgan is many things at once: A surrealist artist whose beyond-trippy items are often fascinated by her synesthesia and an outrageous rapper who spits about roguish capitalists. A 31-year-old analyst and self-proclaimed “serial entrepreneur” who has served in tech for ten years, a Forbes contributing editor from 2018 to 2021. The Justice Department has also charged her with engaging in criminal activity. Reports theguardian.com

Morgan and her husband, Ilya “Dutch” Lichtenstein, were detained on February 8th for allegedly plotting to smuggle $4.5 billion in intercepted Bitcoin. The authorities seized $3.6 billion “directly linked” to a 2016 breach of a digital currency trading called Bitfinex, as per a press statement from the Department of Justice. According to court records, an anonymous hacker took 119,754 bitcoins worth $4.5 billion in February 2022 and moved parts of them through a “complex” chain of 2,000 unlawful transfers that eventually led to “a digital wallet under Lichtenstein’s control.”

A Clear Message For Criminals

To criminals, the message is simple: crypto is just not a haven.” On Tuesday, the special counsel, Lisa Monaco, stated, “We can and will pursue the funds, no matter the source.”

On Linkedin, Lichtenstein, who keeps a low profile online, describes himself as an angel investor. He is a graduate of the famed Y-combinator, a business that has assisted in the establishment of several well-known digital companies.

A magistrate judge ordered that Lichtenstein might be released to home confinement on a $5 million trust co-signed by his parents, while Morgan’s bond was set at $3 million. They were to be detained until their bail terms were met.

Prosecutors had suggested that defendants should be refused bail because they are flight risks with access to large sums of money. Prosecutors claimed detectives discovered a folder labeled “passport thoughts” that gave information about how to create phony IDs, as well as a cache of burner phones, during a check of the couple’s home.

Cybercriminals that use ransomware to attack businesses, governments, and individuals sometimes demand payment in bitcoin. Colonial paid the hackers $2.3 million in cryptocurrency ransom, which was later recovered by the Justice Department.

Cases like these show that the Justice Department “can trace money across the blockchain just as we have always tried to follow it inside the traditional financial system,” according to Kenneth Polite, the department’s criminal division’s assistant attorney general.