Accused of having transferred nearly 120,000 Bitcoins (BTC) worth 71 million euros in 2016 following the hacking of the Bitfinex platform, a New York couple was waiting to know the verdict of their trial. The husband was the first to know his judgment, while his partner will have to wait a little longer before knowing her fate.
For the Bitfinex hack and the theft of nearly 120,000 Bitcoins (BTC), a New York couple is going to jail
For being at the center of one of the largest Bitcoin (BTC) thefts in history, Ilya Lichtenstein, known under the pseudonym “Dutch”, was sentenced this Thursday to 5 years in prison by a federal court in Washington.
With his wife, Heather Morgan, nicknamed “Razzlekahn”Dutch was not initially accused of perpetrating the Bitfinex hack. However, the couple was suspected of having transferred the 119,756 BTC stolen in 2016 to the exchange through more than 2,000 transactions.
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If today it would constitute theft more than 10 billion dollars in cryptocurrenciesit still represented damage of 71 million dollars at the time of the facts. In February 2022, the American federal authorities then seized 94,643 BTC for an amount of $3.6 billion.
For the acts with which Ilya Lichtenstein and Heather Morgan were accused, the two suspects risked up to 20 years of imprisonment for the first and 5 years in prison for the second. However, the conclusion of a plea agreement with the courts allowed them to see their sentences reduced.
So, Dutch, “ a highly qualified IT expert ”, according to the court, would have used several hacking techniques to access the Bitfinex computer network to then authorize BTC transactions to a wallet he owned.
Following this, Dutch called on his wife Razzlekahn to launder their loot. By creating accounts under fictitious identities and moving the stolen BTC in small quantities on illegal crypto exchanges and platformsthey exchanged their cryptocurrencies against non-fungible tokens (NFT), gold or even Walmart vouchers.
According to Jessica Peck, the prosecutor in charge of the case, the New York couple would have been “ meticulous and dedicated to laundering funds, to the point of laundering 21% of the stolen funds in connection with the Bitfinex hack “.
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By cooperating, Dutch and Razzlekahn were offered a reduced sentence
Alongside the Bitfinex hack, Dutch also admitted that when he was a miner, he had experimented with hacking and various financial frauds. In particular, he illegally transferred a small amount of PayProtocol Paycoin (PCI) or even stolen nearly $200,000 in digital assets to an exchange whose name has not been disclosed.
However, in his defense, Ilya Lichtenstein clarified that he had already worked legallyeven running a digital marketing agency from his university residence, as well as a software company with around thirty employees that he co-founded.
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“ His decision to use his skills for criminal purposes is therefore particularly disappointing. However, his journey gives hope for continued and successful rehabilitation, » admitted prosecutor Jessica Peck. It was by confessing his misdeeds and pleading guilty that Ilya Lichtenstein was able to obtain a reduced sentence resulting in 5 years of imprisonment instead of 20.
Heather Morgan was also present at the trial, stating that she could use your skills in the fight against cybercrime ». Razzlekahn will be sentenced on November 18, with the prosecutor having proposed that she serve a sentence of 18 months in prison.
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Source: Bloomberg
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Surprised by the rise of crypto-assets at the end of the 2010s, I began to closely follow this sector which fascinates me to the greatest extent. When I'm not in football stadiums, rugby stadiums or handball halls, I work on writing relevant articles around cryptocurrencies and more broadly, Web3.
Zacharie Tazrout
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