He converted bitcoin to other forms of cryptocurrency, including anonymity-enhanced cryptocurrency (AEC), in a practice known as “chain hopping”; deposited a portion of the criminal proceeds into cryptocurrency mixing services, such as Bitcoin Fog, Helix, and ChipMixer; used U.S.-based business accounts to legitimize their banking activity; and exchanged a portion of the stolen funds into gold coins, which Morgan then concealed by burying them.
The U.S. Department of Justice has announced a married couple, Ilya Lichtenstein, 35, and Heather Morgan, 33, from New York City pleaded guilty today to money laundering conspiracies arising from the hack and theft of approximately 120,000 bitcoin from Bitfinex.
The global cryptocurrency exchange’s network was hacked by Ilya Lichtenstein utilizing a number of advanced hacking tools and techniques. Once inside, he fraudulently authorized more than 2,000 transactions in which 119,754 bitcoin was transferred from Bitfinex to a cryptocurrency wallet in Lichtenstein’s control.
Ilya Lichtenstein converted Bitcoin to anonymity-enhanced cryptocurrencys (AECs)
Among the numerous sophisticated laundering techniques, Ilya Lichtenstein used fictitious identities to set up online accounts; utilized computer programs to automate transactions; deposited the stolen funds into accounts at a variety of darknet markets and cryptocurrency exchanges, and then withdrew the funds, which obfuscates the trail of the transaction history by breaking up the fund flow.
He also converted bitcoin to other forms of cryptocurrency, including anonymity-enhanced cryptocurrency (AEC), in a practice known as “chain hopping”; deposited a portion of the criminal proceeds into cryptocurrency mixing services, such as Bitcoin Fog, Helix, and ChipMixer; used U.S.-based business accounts to legitimize their banking activity; and exchanged a portion of the stolen funds into gold coins, which Morgan then concealed by burying them.
To cover his tracks, he went back into Bitfinex’s network and deleted access credentials and other log files that may have given him away to law enforcement. Heather Morgan, his wife, was found to have helped Ilya Lichtenstein in laundering the stolen funds.
U.S. authorities arrested the couple in February 2022 after the government seized approximately 95,000 of that stolen bitcoin from cryptocurrency wallets in the defendants’ control. The recovered funds were valued at approximately $3.6 billion. Since their arrests, the government has seized another approximately $475 million tied to the hack.
Maximum penalty of 20 years in prison
Ilya Lichtenstein pleaded guilty to conspiracy to commit money laundering, which carries a maximum penalty of 20 years in prison.
Heather Morgan pleaded guilty to one count of money laundering conspiracy and one count of conspiracy to defraud the United States, each of which carries a maximum penalty of five years in prison.
A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
