Woman pretended to be a rapper to launder BRL 21 billion in bitcoins – 08/04/2023 – Market

A couple of cybercriminals have pleaded guilty to trying to launder $4.5 billion in bitcoins stolen in a 2016 hack.

Heather Morgan and her husband, Ilya Lichtenstein, were arrested in 2022 in New York after the police investigation traced their billionaire fortune to the theft of cryptocurrencies.

As part of the plea deal, Lichtenstein, who is a programmer, pleaded guilty to being behind the hacking attack, and Morgan also pleaded guilty to an additional charge of conspiring against the United States.

While the duo was not discovered, Morgan posed as a rapper and technology entrepreneur.

Even as she tried to cover up her crimes, she posted dozens of clips of profanity-filled rap songs, filmed in locations around New York, under the stage name Razzlekhan.

In the lyrics, the “rapper” bragged about being a “tough girl who makes a lot of money” and the “alligator of Wall Street”.

In articles published in Forbes magazine, Morgan still sold herself as a successful technology entrepreneur, classifying herself as “an economist, serial entrepreneur, software investor and rapper”.

But while she was developing that “persona” as a musician and businesswoman, she and her husband were trying to launder the money they had made from the hack on Bitfinex, a cryptocurrency platform.

Now, the couple will serve prison terms, with Lichtenstein facing up to 20 years in prison, and Morgan, up to 10 years.

At the time of their arrest in February 2022, the couple’s worth of 119,000 bitcoins was valued at $4.5 billion — making it the largest cryptocurrency seizure ever carried out by US authorities and the largest single financial seizure in US history. US Department of Justice.

When the theft took place in 2016, bitcoins were worth around $71 million.

criminal scheme

Documents filed in court detail how the couple turned Bitfinex’s millions of dollars worth of bitcoin into traditional cash, using sophisticated techniques to try to avoid detection.

One of the couple’s main slips, according to the police, was making purchases with Walmart supermarket coupons paid with stolen funds.

“Police were able to link the Walmart vouchers to part of the money stolen in the Bitfinex hack, which led to the investigation moving forward,” said Jonathan Levin, founder of Chainalysis, a cryptocurrency investigation firm that was involved in the discovery.

“Buying gift cards and moving money between different exchanges and different cryptocurrencies never really created the break in traceability that the couple wanted,” he added.

When the police carried out the operation in the couple’s apartment in Manhattan, New York, they found hollow books made to hide cell phones. They also found dozens of disposable cell phones, several flash drives and $40,000 in cash.

Investigators managed to decipher a detailed spreadsheet that thoroughly described the couple’s methods of laundering the money, which allowed them to recover almost all of the stolen amount.

In court documents, prosecutors say they found communication records that indicate Morgan and Lichtenstein planned to flee to Russia — his home country.

If they had succeeded, they would probably have lived the lives of billionaires, far from being arrested in the US.

When the theft took place, Bitfinex customers were forced to “cut off”, losing 36% of their assets held on the cryptocurrency exchange. Afterwards, they were refunded.

Now, the Hong Kong-based company and some customers who exchanged their losses for Bitfinex shares at the time are about to receive the reward once the recovered bitcoins are returned.

This text was originally published here.