Ilya Lichtenstein and Heather Morgan, the couple apprehended last year for orchestrating the extensive 2016 Bitfinex hack involving billions of dollars in cryptocurrency, have confessed to their crimes in court. Lichtenstein has admitted to utilizing sophisticated hacking tools and techniques to breach the cryptocurrency exchange's network. He proceeded to authorize 2,000 transactions, transferring 119,754 bitcoins to his controlled wallets. To avoid detection, he wiped out access credentials, logs, and any digital traces that could lead to his identification. Morgan, his wife, actively assisted in the movement and laundering of the stolen funds.
At the time of their arrest, the Justice Department had seized 95,000 of the stolen bitcoins, valued at an astounding $3.6 billion. This seizure marked the agency's largest financial apprehension in history. Subsequently, authorities were able to trace more of the pilfered funds, recovering an additional $475 million worth of cryptocurrency.
According to the DOJ, Lichtenstein and Morgan employed false identities to create online accounts on darknet markets and cryptocurrency exchanges. From there, they withdrew the funds and distributed the bitcoins by converting them into other cryptocurrencies and utilizing crypto mixing services to obscure the coins' origins, making them harder to trace. The couple also established US-based businesses to create an appearance of legitimacy in their banking activities. Morgan even promoted their "multimillion dollar business" on TikTok, claiming it had received "zero outside funding." The stolen funds were also used to purchase physical gold coins, which Morgan then buried as part of their elaborate cover-up scheme.
Precisely, Lichtenstein has pleaded guilty to the charge of conspiracy to commit money laundering, potentially facing a maximum prison sentence of 20 years. On the other hand, Morgan has pleaded guilty to one count of money laundering conspiracy and one count of conspiracy to defraud the United States, each carrying a maximum prison sentence of five years. Their guilty pleas reflect the severity of their involvement in the massive Bitfinex hack and the subsequent laundering of the stolen funds.