A married couple involved in cyber-crime has confessed to attempting to launder $4.5 billion (£3.5 billion) worth of Bitcoin, which was stolen in a h*ck back in 2016. Heather Morgan and Ilya Lichtenstein were apprehended in New York last year when police traced the proceeds of the crypto heist to them. While evading the authorities, Morgan adopted the persona of a rapper and tech entrepreneur.

In a plea deal, Lichtenstein admitted to being responsible for the hack, and both he and Morgan pleaded guilty to money laundering. Additionally, Morgan pleaded guilty to conspiring to defraud the United States.

Despite trying to conceal their illegal activities, Morgan released numerous explicit music videos and rap songs filmed around New York under the alias Razzlekhan.

Her lyrics portrayed her as a "bad-ass money maker" and "the crocodile of Wall Street." Moreover, she claimed to be a successful tech businesswoman in articles published in Forbes, labeling herself as an "economist, serial entrepreneur, software investor, and rapper."

While building her rapping and tech persona, the couple was attempting to cash out the stolen fortune from Bitfinex, a crypto firm. Now, they face potential prison sentences, with Lichtenstein facing up to 20 years and Morgan facing up to 10 years.

At the time of their arrest in February 2022, the 119,000 Bitcoins seized were valued at around $4.5 billion, marking the largest single financial seizure in the history of the US Department of Justice.

When the h*ck took place, the Bitcoins were worth about $71 million. Detailed court documents revealed how the couple utilized sophisticated techniques to convert millions of dollars of Bitfinex Bitcoins into traditional money while trying to avoid detection.

Records show the couple:

Split up the Bitcoin into tiny amounts and transferred it to thousands of different crypto wallets with fake identities

Mixed their stolen funds with another criminal cryptocurrency on the darknet marketplace Alphabay

Purchased gold coins

Set up shell companies to make the Bitcoin funds look legitimate

The successful police operation is the latest case to utilize tools able to analyze transactions on Bitcoin's public blockchain ledger.

One of the couple's key mistakes was shopping with Walmart supermarket vouchers paid for with the stolen funds.

Court documents showed in detail how the couple cashed out millions of dollars of Bitfinex Bitcoins into traditional money using sophisticated techniques to try to stay under the radar.

Records show the couple:

Split up the Bitcoin into tiny amounts and transferred it to thousands of different crypto wallets with fake identities
Mixed their stolen funds with another criminal cryptocurrency on the darknet marketplace Alphabay
Purchased gold coins
Set up shell companies to make the Bitcoin funds look legitimate

The successful police operation is the latest case to utilize tools able to analyze transactions on Bitcoin's public blockchain ledger.

One of the couple's key mistakes was shopping with Walmart supermarket vouchers paid for with the stolen funds.

When police raided the couple's Manhattan apartment, they found hollowed-out books created to conceal mobile phones.

They also discovered dozens of burner handsets, several USB sticks, and $40,000 in cash.

Police successfully decrypted a spreadsheet meticulously detailing the couple's intricate methods for laundering the stash, allowing them to recover nearly the full amount.

In court documents, prosecutors say they uncovered communication records that indicate Morgan and Lichtenstein were planning to flee the US for Russia - his country of birth.

If successful, they would have probably lived a billionaire lifestyle, safe from arrest by the US.

When the h*ck happened, Bitfinex customers took an enforced "haircut", losing 36% of their assets held by the crypto exchange. By 2019, the company had reimbursed the victims, so now the Hong Kong-based firm and some customers who exchanged their losses for shares are in line for a windfall once the recovered Bitcoins are returned.

Too bad

Thieves