A husband and wife, who sidelines as rapper called Razzlekhan, have been charged with money laundering and fraud after the seizure of £3.7 billion in allegedly stolen Bitcoin.
Ilya Lichtenstein, 34, and Heather Morgan, 31, both from New York, are accused of using fake identities to convert Bitcoin into other digital currencies, allegedly spending five years laundering a cache of cryptocurrency which was stolen in 2016.
Millions of dollars are said to have been used to buy gold and non-fungible tokens, along with Walmart gift cards.
The couple were both detained in Manhattan by officers from the US Department of Justice on Tuesday, after a probe involving investigators from Washington DC, New York, Chicago, and Ansbach in Germany. They were due to face a federal judge on Wednesday.
Morgan has described herself online as an investor, surrealist artist, fashion designer and “badass CEO”, and produces rap music under the stage name Razzlekhan. In one track she dubs herself the “Crocodile of Wall Street”, and she says her rap alias is based on Genghis Khan “but with more pizzazz”.
The criminal case stems from the 2016 theft by a hacker of nearly 120,000 Bitcoin, then worth £52 million. Its value has risen dramatically.
Announcing the charges, Deputy Attorney General Lisa Monaco said: “In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions.”
They are accused of “laundering the proceeds” of 119,754 Bitcoin stolen from trading platform Bitfinex when it was breached by a hacker who made more than 2,000 unauthorised transactions.
It is said the currency went into a digital wallet under Lichtenstein’s control, with about 25,000 Bitcoin then being transferred into the couple’s accounts.
US authorities said they set up online accounts with fake IDs, and used automated computer programs, “darknet markets” and “chain hopping” to distance the money from the Bitcoin, 94,000 of which has been recovered. Lichtenstein and Morgan were charged with conspiracy to defraud the US and conspiracy to commit money laundering.
