Razzlekhan’s Husband Gets Five Years Prison Sentence for Bitfinex Hack

As a seasoned cybersecurity researcher with over two decades of experience under my belt, I can confidently say that the case of Ilya Lichtenstein is one for the books. This 35-year-old digital bandit managed to pull off an audacious heist, making off with approximately 120,000 bitcoins from Bitfinex in 2016. The methods he used were as sophisticated as they come, employing advanced hacking tools and techniques that left the network vulnerable.

Ilya Lichtenstein received a five-year prison sentence due to his involvement in the theft of around 120,000 bitcoins (BTC) from the cryptocurrency exchange Bitfinex. The U.S. Department of Justice made this announcement on Thursday.

In the year 2016, a 35-year old individual gained unauthorized access to a network, employing sophisticated hacking methods and equipment. Once he had penetrated the network, Lichtenstein dishonestly approved over 2,000 transactions that moved approximately 119,754 bitcoins from Bitfinex to his personal digital wallet. To conceal his actions from law enforcement, Lichtenstein removed access credentials and other relevant logs from Bitfinex’s network.

After the hack, Lichtenstein, together with his spouse Heather Morgan (also recognized as the rapper “Razzlekhan”), allegedly concealed and moved the stolen assets. The court will sentence Morgan on November 18th, and prosecutors have suggested a term of 18 months imprisonment for her.

As a researcher delving into the intricacies of digital currency crimes, I’ve uncovered that, following court records, the implicated couple successfully laundered approximately 25,111 Bitcoins – representing around 21% of the hoard stolen from Bitfinex by Lichtenstein. This laundering operation involved a network of Eastern European bank accounts and bitcoin tumbling services, meticulously concealing the source of the funds. The techniques employed were so intricate that prosecutors labeled them as “the most sophisticated money laundering methods [IRS agents] had encountered to date.

One way to rephrase the given text could be: They employed several strategies, including using computer software for automated transactions, transferring illegally obtained money to diverse darknet marketplaces and cryptocurrency platforms, then withdrawing it; swapping bitcoin for other types of cryptocurrencies through a process called “chain hopping”; depositing a share of their criminal earnings into cryptocurrency tumbling services; utilizing American business accounts to legitimize Lichtenstein’s and Morgan’s banking activities; and trading a part of the stolen funds for gold coins.

Although Lichtenstein’s methods for money laundering were intricate, Brett Johnson, a former founder and leader of the cybercrime group Shadow Crew, expressed doubts about their effectiveness when speaking to CoinDesk last year. Johnson believed that some of Lichtenstein’s tactics, such as directly connecting his Coinbase accounts to the laundering, seemed illogical and suggested inexperience on Lichtenstein’s part. “Ilya is a complete novice at this,” Johnson stated at the time. “If you examine the way he was trying to launder money, he was doing everything incorrectly.

At first, Lichtenstein and Morgan were thought to be merely involved in money laundering. However, Lichtenstein later confessed to being the hacker. Interestingly, neither of them was indicted for the Bitfinex hack itself, even though Lichtenstein admitted responsibility for it.

Instead, on August 3, 2023, both individuals admitted their guilt to one count of conspiring to launder money, a charge that could result in up to 20 years behind bars. In line with the five-year sentence proposed by prosecutors, Lichtenstein will also serve an additional three years under supervised release.