Cybersecurity

Federal Judge Releases ‘Razzlekhan,’ Orders Other Bitfinex Hack Laundering Suspect to Remain in Jail

WASHINGTON, D.C. — A federal judge has ordered one half of the couple accused of laundering the proceeds of a 2016 Bitfinex hack to remain in federal custody until they face trial.

Prosecutors allege that Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, conspired together to launder 119,754 bitcoins – worth over $5 billion in today’s prices – that were stolen during the 2016 hack of Bitfinex. The couple faces two conspiracy charges each that could see them face up to 25 years in prison. A judge ruled Monday that Morgan could be released on bail under strict conditions, but Lichtenstein will remain in custody pending trial.

Monday’s decision, made by Beryl Howell, chief judge of the U.S. District Court for the District of Columbia, overturns an earlier order made last week by a New York magistrate judge to allow the couple to be released on bond. Howell had already previously stayed the order on an emergency basis after the New York judge said they could be released on bail.

Howell sided with prosecutors’ position that the couple have both the motive and means to skip bail and flee the United States.

Earlier this month, federal agents seized approximately 94,000 bitcoins (worth over $3.6 billion) held in a wallet whose private keys were found in one of Lichtenstein’s cloud accounts. However, the government alleges the couple still has access to bitcoin worth over $300 million.

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