Ilya Lichtenstein and Heather Rhiannon Morgan, a couple from New York, are reportedly preparing to plead guilty in a high-profile case involving the alleged laundering of $4.5 billion in bitcoin, stolen during the infamous 2016 Bitfinex hack. According to a recent entry in the federal court docket in Washington, D.C., the couple has been newly charged with an “information,” a type of charging document often used when defendants intend to enter a guilty plea.
Scheduled for separate arraignments and plea hearings on August 3, both Lichtenstein and Morgan will be appearing before the court. However, the specific charges detailed in the information have not been made public. It is common for an information to contain fewer or different charges than initially filed against defendants. Judge Colleen Kollar-Kotelly has instructed the prosecutors and defense lawyers to submit plea paperwork, including details of the charged offense(s), statutory provisions, elements of the offense, the plea agreement copy, penalties, and federal sentencing guideline calculations, by Thursday.
The couple had initially pleaded not guilty in February 2022 when they were arrested on charges of money laundering conspiracy and conspiracy to defraud the United States. While Heather Rhiannon Morgan, known as “Razzlekhan,” was released on a $3 million bond, Ilya Lichtenstein, nicknamed “Dutch,” has remained in jail since February 2022 without bond due to concerns about his potential flight risk as a Russian emigre.
The U.S. Attorney’s Office in Washington, which is handling the case, has declined to comment on the matter. The defense lawyers representing the couple have not yet responded to CNBC’s requests for comment.
The accusations against Lichtenstein and Morgan involve the alleged attempt to launder the proceeds of 119,754 bitcoin stolen from Bitfinex’s platform in August 2016. Importantly, the couple was not charged in connection with the actual hacking incident at the Hong Kong-based cryptocurrency exchange. At the time of their arrest, the Department of Justice revealed that they had managed to seize over 94,000 bitcoin associated with the hack, valued at approximately $3.6 billion during the seizure, marking the largest financial seizure in DOJ history.
Over the years, the value of the stolen bitcoin surged significantly, adding complexity to the alleged money laundering process. The DOJ stated that about 25,000 of the stolen bitcoin were laundered through intricate transactions within the past five years, eventually being deposited into financial accounts controlled by Lichtenstein and Morgan.
Despite ongoing plea negotiations, there are uncertainties surrounding the potential implications of the couple’s guilty pleas and how it may impact the broader cryptocurrency landscape and legal actions against individuals involved in the Bitfinex hack. The unfolding case draws considerable attention from the cryptocurrency community and financial authorities, who closely monitor the developments in this landmark trial.
