Beautiful Virgin Islands

Wednesday, May 13, 2026

Cryptocurrency worth billions seized after couple arrested in connection with exchange hack

Cryptocurrency worth billions seized after couple arrested in connection with exchange hack

A New York couple have been arrested accused of conspiring to launder bitcoin that was stolen during the massive breach more than six years ago.

The US has seized $3.6bn (£2.65bn) in bitcoin and announced the arrests of a couple accused of conspiring to launder cryptocurrency that was stolen in a 2016 hack of Bitfinex, a virtual currency exchange.

The Department of Justice said the action represents its largest-ever financial seizure.­­

Ilya Lichtenstein and his wife Heather Morgan are accused of conspiring to launder the proceeds of 119,754 bitcoins after a hacker attacked Bitfinex and initiated more than 2,000 transactions.

The funds were valued at $71m (£52m) at the time but are now worth over $4.5bn (£3.3bn), according to officials.

The couple had active public profiles, especially Ms Morgan, a rapper who goes by the name "Razzlekhan," a pseudonym she said on her website referred to Genghis Khan "but with more pizzazz".

Ms Morgan, a former Forbes contributor, describes herself as an investor, surrealist artist and fashion designer - and even declared herself the "Crocodile of Wall Street" in one of her songs.

How US officials recovered the funds


Matthew Graves, the US attorney for the District of Columbia, said the money moved through a major darknet exchange linked to a host of crimes.

The stolen bitcoin was allegedly sent to a digital wallet controlled by Mr Lichtenstein.

Over the last five years, 25,000 of these bitcoin were transferred out of the wallet using a "complicated money laundering process" and into financial accounts controlled by the couple, prosecutors said.

Millions of dollars were allegedly cashed out through bitcoin ATMs, with proceeds used to buy gold and non-fungible tokens as well as other items such as Walmart gift cards used for personal expenses.

The remaining funds - more than 94,000 bitcoin - allegedly stayed in the wallet used to store the illegal proceeds from the hack.

Search warrants allowed special agents to gain access to files in an online account allegedly controlled by Mr Lichtenstein, which contained the private keys to access the wallet.

All of the funds that were in the wallet were seized, with a value of more than $3.6bn (£2.65bn).

Cryptocurrency 'not a safe haven for criminals'


The couple have been accused of using fake identities to set up online accounts, using computer programmes to automate financial transactions, depositing the stolen funds into "darknet markets" and then withdrawing them to hide their movement, and using US-based business accounts to legitimise their banking activity.

"Today's arrests, and the department's largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals," said Deputy Attorney General Lisa O Monaco.

"In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions.

"Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter what form it takes."

Mr Lichtenstein, 34, and Mrs Morgan, 31, are charged with conspiracy to commit money laundering, which carries a maximum sentence of 20 years in jail, and conspiracy to defraud the US, which carries a maximum sentence of five years in prison.

The couple were not charged in the Bitfinex hack.

They are due to appear in court later on Tuesday.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
The Great Western Exit: Why Best Citizens Are Fleeing the Rich World [PODCAST]
The New Robber Barons of Intelligence: Are AI Bosses More Powerful Than Rockefeller?
The End of the Old Order [Podcast]
Britain’s Democracy Is Now a Costume
The AI Gold Rush Is Coming for America’s Last Open Spaces [Podcast]
The Pentagon’s AI Squeeze: Eight Tech Giants Get In, Anthropic Gets Shut Out [Podcast]
The War Map: Professor Jiang’s Dark Theory of Iran, Trump, China, Russia, Israel, and the Coming Global Shock [Podcast]
Labour Is No Longer a National Party [Podcast]
AI Isn’t Stealing Your Job. It’s Dismantling It Piece by Piece.
Lawyers vs Engineers: Why China Builds While America Litigates [Podcast]
Churchill’s Glass: The Drunk, the Doctor, and the Myth Britain Refuses to Sober Up From
Apple issues an unusual warning: this is how your iPhone can be hacked without you doing anything
The Met Gala Meets the Age of Billionaire Backlash
Russian Oligarch’s Superyacht Crosses Hormuz via Iran-Controlled Route
Gunfire Disrupts White House Correspondents’ Dinner as Trump Is Evacuated
A Leak, a King, and a Fracturing Alliance
Inside the Gates Foundation Turmoil: Layoffs, Scrutiny, and the Cost of Reputational Risk
UK Biobank Breach Exposes Health Data of 500,000, Listed for Sale on Chinese Platform
KPMG Cuts Around 10% of US Audit Partners After Failed Exit Push
French Police Probe Suspected Weather-Data Tampering After Unusual Polymarket Bets on Paris Temperatures
News Roundup
Microsoft lost 2.5 millions users (French government) to Linux
Privacy Problems in Microsoft Windows OS
News roundup
Péter András Magyar and the Strategic Reset of Hungary
Hungary After the Landslide — A Strategic Reset in Europe
×