Booking photos for Heather Morgan and Ilya Lichtenstein.
Courtesy: Alexandria Adult Detention Center.
An individual from New York City has confessed to being the original hacker in the 2016 cyberattack on the Bitfinex cryptocurrency exchange, resulting in the theft of $4.5 billion worth of bitcoin. Ilya “Dutch” Lichtenstein, age 35, made this shocking admission during his guilty plea for money laundering in a federal court in Washington, D.C. His wife, Heather Rhiannon Morgan, age 33, also pleaded guilty to charges of money laundering conspiracy and conspiracy to defraud the United States government. Lichtenstein’s admission revealed previously unknown information about the identity of the bitcoin hacker. However, the couple was not charged directly in connection with the hack itself. Lichtenstein could face a maximum sentence of 20 years in prison for his money laundering conspiracy charge, while Morgan could face up to five years in prison. Lichtenstein, a Russian emigre, has been in custody since his arrest and will remain jailed until his sentencing, while Morgan has been released on $3 million bond.
At the time of the couple’s arrest in February 2022, the Department of Justice had seized over 94,000 out of the more than 119,000 hacked bitcoin, totaling approximately $3.6 billion. The DOJ announced on Thursday that an additional approximately $475 million associated with the hack had also been seized. Bitfinex, the cryptocurrency exchange targeted in the attack, stated that it had made extensive efforts to compensate its customers after the hack and worked diligently with the DOJ to identify the hackers involved. The value of the stolen bitcoin has significantly increased over the years, going from $70 million at the time of the theft to $4.5 billion today.
The Department of Justice revealed that Lichtenstein employed advanced hacking tools and techniques to gain access to Bitfinex’s network. Once inside, he orchestrated over 2,000 fraudulent transactions, transferring a total of 119,754 bitcoin from Bitfinex to a cryptocurrency wallet under his control. After the hack, Lichtenstein deleted access credentials and log files to cover his tracks, and then enlisted Morgan’s help in laundering the stolen funds. Approximately 25,000 of the stolen bitcoin were transferred out of Lichtenstein’s wallet through a complex money laundering process, with some of the funds ending up in financial accounts controlled by the couple.
During Lichtenstein’s plea hearing, it was revealed that he converted some of the stolen assets into gold coins. Morgan, on the other hand, buried gold coins at a location now known to law enforcement. Lichtenstein’s past travels to Ukraine and Kazakhstan were part of his efforts to convert digital assets to cash through Russian and Ukrainian intermediaries, with the cash eventually being shipped to addresses in Russia and Ukraine. Lichtenstein physically collected the cash and deposited it into U.S. accounts to facilitate its retrieval in New York City.
The plea hearings for the so-called “Crypto Couple” were rescheduled to accommodate the arraignment of former U.S. President Donald Trump in the same courthouse on Thursday. Trump was charged in connection with crimes related to his attempts to overturn the results of the 2020 election. According to a charging document filed last month, Lichtenstein engaged in a series of complex transactions to move the stolen bitcoin across multiple accounts and platforms in order to conceal its origin.
Netflix announced that it has commissioned a series about the couple following their arrests last year.
– Eamon Javers reported from Washington, D.C., and Dan Mangan reported from Natick, Mass.
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