Heather Morgan (31) from New York calls herself a “surreal artist”, tech investor and rapper, and she wrote for the business magazines Inc. and Forbes† According to a concise biography on the latter title’s website, she likes to think about better ways to fight fraud and cybercrime, a topic she also sometimes discusses for Forbes. wrote about†
That interest has been seen in a new light since Morgan on Tuesday with her husband Ilya Lichtenstein (34) – an American who also holds Russian nationality – was charged by the US justice system for laundering approximately $ 4.5 billion (3 .9 billion euros) in stolen bitcoins. Authorities confiscated $3.6 billion worth of cryptocurrencies when they were arrested in Manhattan. According to a press release it would be the largest amount seized in the history of the department.
This means that a large part of the 119,754 bitcoins that were stolen in 2016 via a hack at Bitfinex, a large cryptocurrency exchange that was located in Hong Kong at the time. At the time, the loot was worth about $71 million, making it one of the larger crypto heists – though it still lagged far behind the $450 million worth of bitcoins stolen from Japan’s Mt. gox.
Immediately after the robbery at Bitfinex, the price of digital currency briefly fell by 20 percent, making the loot worth only $ 65 million, but due to the price increases since then, it is now a multiple of that amount. For the time being, US authorities only suspect Morgan and Lichtenstein of laundering the loot, not the theft itself.
It appears that the couple had been laundering the looted bitcoins for years. Immediately after the robbery, the loot was stored in one so-called crypto wallet, and most of the bitcoins have remained there ever since. Bitcoin transactions are public and can therefore be followed by everyone – although the sender and receiver remain anonymous. According to the judiciary, in the past five years, about 25,000 bitcoins were transferred to other accounts via thousands of partly automated small transactions, paid out via underground crypto exchanges, or converted into gift cards from, among others, retail chain Walmart.
The company Elliptic, which analyzes cryptocurrency transactions and researched the loot from the Bitfinex hack, concluded in a blog post last year that it will take the then-unknown money launderers “at the current rate another 114 years to process the rest of the money.”
Still, the two had to be careful: the once unregulated cryptocurrency trade is increasingly in the interest of investigative services, and large transactions quickly become apparent. According to prosecutor Lisa Monaco, a number of crypto exchanges have blocked suspicious transactions from Morgan and Lichtenstein.
The fact that the duo ran into the light is thanks to a list of crypto wallets that Lichtenstein kept in a cloud storage and that was claimed by the American investigative services. Based on that, they were able to complex web of bitcoin transactions to follow. According to Monaco, the arrest of the duo shows that cryptocurrencies are not a safe haven for criminals. “We can and will follow the money.”
Morgan withdrew after the announcement of her arrest social media especially the attention with its activities as rapperunder the stage name Razzlekhan† In a video clip that has now been shielded on YouTube, she called herself “a real risk taker and bad-ass money maker”†
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