Heather Morgan, also known by her rapper alias “Razzlekhan,” has been sentenced to 18 months in prison for her role in laundering Bitcoin stolen during the 2016 hack of cryptocurrency exchange Bitfinex.
Morgan’s Guilty Plea and Sentencing
In a hearing on Nov. 18, Judge Colleen Kollar-Kotelly of Washington, D.C.’s District Court handed down the sentence after Morgan pleaded guilty in August 2023 to charges of conspiracy to commit money laundering and defraud the United States.
Morgan and her husband, Ilya Lichtenstein, admitted to laundering a significant amount of Bitcoin tied to the 2016 hack. The stolen funds, initially worth millions, had grown to a staggering $10.8 billion by the time authorities seized them.
While Morgan received 18 months, Lichtenstein, who also confessed to hacking Bitfinex, was sentenced on Nov. 14 to five years in prison. His reduced sentence, far below the 20-year maximum, reflects his cooperation with investigators and lack of prior criminal history.
Details of the 2016 Hack
In the 2016 incident, Lichtenstein hacked Bitfinex, stealing 119,754 Bitcoin. The theft marked the largest seizure in the history of the U.S. Department of Justice. Initially, authorities believed the couple was only involved in laundering the stolen cryptocurrency, but Lichtenstein later admitted to executing the hack.
Crypto Crime Prosecution: A Shift in Focus?
Unlike many high-profile crypto cases handled by the Southern District of New York, this case was prosecuted in Washington, D.C. The Southern District has overseen major trials involving crypto firms, including executives tied to the collapse of FTX and Celsius Network.
However, a Nov. 15 statement from the Securities and Commodities Fraud Task Force suggested a possible reduction in future crypto crime investigations. Adding to speculation about the direction of enforcement, former SEC Chair Jay Clayton has been nominated by President-elect Donald Trump to potentially serve as U.S. Attorney for the district starting in 2025.
