Ilya Lichtenstein and Heather Morgan, a Russian-American tech entrepreneur and his aspiring rapper wife, have reached a plea agreement with the court over an alleged scheme to launder billions of dollars’ worth of cryptocurrency stolen from one of the world’s biggest virtual currency exchanges. On August 3, the couple is scheduled to appear for a plea hearing and arraignment before Judge Colleen Kollar-Kotelly of the Federal District Court in Washington, D.C.
The two are accused of laundering 119,754 Bitcoin, worth $71 million when it was stolen in 2016. They are not charged with involvement in the theft itself. Mr. Lichtenstein and Ms. Morgan’s lawyers have not commented on the plea agreement.
The exchange breach was one of several that caused the cryptocurrency market to plummet, revealing the security vulnerabilities of Bitcoin and other digital currencies. Cryptocurrency trading often occurs on unregulated exchanges, offering very little information about their operations. This lack of regulation has caused numerous problems within the virtual currency world.
By the time of the couple’s arrest, the value of the stolen Bitcoin had grown to $4.5 billion. Court documents state that the hacker initiated 2,000 transactions to transfer the stolen funds to a digital wallet under Mr. Lichtenstein’s control. To avoid detection, the couple allegedly moved the money in small sums across different virtual-currency exchanges and used U.S. business accounts to further conceal their illegal activity.
Mr. Lichtenstein and Ms. Morgan allegedly used some of the Bitcoin to buy gold, nonfungible tokens, and prepaid debit cards. One of these $500 cards was used to pay Uber and Hotels.com charges and buy a PlayStation. The couple were living in a two-bedroom condominium in an upscale building in Lower Manhattan when they were arrested.
Mr. Lichtenstein is a tech entrepreneur with dual American-Russian citizenship, while Ms. Morgan is an entrepreneur and rapper who goes by the name “Razzlekhan.” She had written a Forbes article on protecting businesses from cybercriminals and fraudsters during the pandemic.
Susan C. Beachy contributed research.
