Heather Morgan of Bitfinex Crypto Heist Cleared to Seek Proper Employment

American rapper and entrepreneur Heather Morgan, indicted for contriving with her husband Ilya Lichtenstein to launder money, has been permitted by a judge to seek proper employment.


Her case will still be on trial, but she is authorized to get a job that can earn her more than $10,000 in a month.

The digital currencies stolen from the Bitfinex 2016 heist are presently worth $4.5 billion in Bitcoin (BTC). So far, the United States authorities have successfully recovered over $3.6 billion in crypto connected to the hack.

Recalling, the United States Department of Justice attested that the Bitfinex heist was the biggest crypto robbery it had ever unravelled. The couple Heather Morgan and Ilya Lichtenstein were picked in Manhattan due to their suspected connections to the hack.

How Did the Couple Achieve the Heist?

The man and his wife conspired to launder about 119,754 Bitcoin that were redirected from Bitfinex through a breach of the exchange’s security system. With the loopholes created in the system, the hackers were able to perform 2000 unauthorized transactions. Upon investigation, the transactions were traced down to wallets linked to Lichtenstein.

Several transfers worth about 25,000 BTC were noticed to have been authorized from Lichtenstein’s wallet. The transferred funds ended up in a financial account that belonged to both Lichtenstein and Morgan. The remaining crypto worth about 94,000 BTC is yet to leave the initial account to which it was sent during the heist.

Further investigations led to the discovery of online files linking the ownership of the account to Lichtenstein. Private keys needed to access the wallets where the funds were deposited were discovered in those online files. Strapped with this information, the authorities were able to retrieve the 94,000 BTC left.

However, the analysis showed the complex money laundering techniques that the couple used. Lichtenstein and Morgan utilized computer programs to automate the transactions and created false identities to set online accounts. They also involved anonymity-enhanced virtual currency (AEC) in converting the BTC to other cryptocurrencies.

While the Bitfinex hack mimics those of MtGox, other less draining hacks have been recorded by other exchanges like KuCoin and Crypto.com.

Image source: Shutterstock


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What We Know About the Bizarre Couple Charged With the Bitfinex Hack

Key Takeaways

  • The U.S. Department of Justice has charged Ilya Lichtenstein and Heather Morgan for conspiracy to launder funds tied to the 2016 Bitfinex hack. 
  • The couple’s quirky online persona’s have led some to suggest that they are not behind the hack, despite the DoJ accusing them of laundering the stolen funds.
  • While evidence suggests that Lichtenstein and Morgan had the expertise required to pull off the Bitfinex hack, it doesn’t mean they were the ones responsible.

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U.S. authorities have confiscated $3.6 billion from Ilya Lichtenstein and Heather Morgan in the largest asset seizure in history. However, the eccentric personalities of the suspects have left many wondering if the pair really are the ones responsible for hacking Bitfinex back in 2016.  

Who Are the Alleged Bitfinex Hackers?

When the U.S. Department of Justice arrested two suspects and confiscated $3.6 billion worth of cryptocurrencies Tuesday morning, the world was eager to learn the identities of the alleged thieves. Onlookers probably imagined the quintessential shady hackers: pasty, reclusive, and antisocial. So it came as a big surprise when authorities revealed they had taken Ilya Lichtenstein and Heather Morgan into custody, a successful power couple living in New York with a penchant for zany behavior and a side hustle making amateur rap videos. 

Media pundits quickly revealed the pair’s highly-cultivated and colorful online presence, rooting through YouTube videos, TikTok’s, and even Morgan’s op-eds as a former Forbes Columnist. Morgan, 31, is described in her Forbes bio as “an expert in persuasion, social engineering, and game theory.” In her rap videos, where she performs under the alias Razzlekhan, she calls herself “the crocodile of Wall street.” Other hijinks she’s shared on social media include eating and drinking with her feet, explaining how she built a multimillion-dollar business with “zero outside funding,” and lots and lots of dancing and rapping. 

Outside of managing her online persona, Morgan has run talks titled “How to Social Engineer Your Way Into ANYTHING” to packed audiences in New York Salons. In the talks, she explains how social engineering is about exploiting people’s cognitive biases and “triggering people to do what they’re already programmed to do.” She appears to have a strong aptitude for her brand of social engineering, and gives several examples of how she’s used it in her day-to-day life. 

Lichtenstein, 34, presents a more grounded image online. In his Twitter bio, he describes himself as a “human angel investor, web3 developer, and serial entrepreneur.” He also has a strong technical background, cofounding MixRank, a Y-Combinator-backed start-up that helps companies analyze marketing data around customers and competitors. However, he also stars in many of Morgan’s online antics, dancing around dressed in a Viking helmet and sharing his opinions on Keto diet lemon cookies. 

The pair are far from what many people expected in a pair of multi-billion-dollar hackers. Some have suggested that Lichtenstein and Morgan are merely accomplices or “fall guys” for the real hacker who is yet to be caught. Others believe that the pair are indeed responsible, citing Morgan’s social engineering prowess and the pair’s technical backgrounds as evidence that they are capable of the heist. As no official post-mortem on the 2016 Bitfinex hack was ever released, it’s unclear how the exchange’s wallets were compromised.

Crypto Briefing looked into the available facts and evidence surrounding the pair and the criminal charges levied against them. Join us as we assess how likely it is that Lichtenstein and Morgan are the criminal masterminds behind the Bitfinex hack.

Were Lichtenstein and Morgan Behind the Hack? 

Despite Lichtenstein and Morgan’s eccentric persona’s and relative internet celebrity, the couple appear to have the expertise needed hack Bitfinex. Lichtenstein’s technical background in coding and data analysis likely provided him with many of the skills necessary to crack into the crypto exchange, more so back in 2016 when security standards were less rigorous. 

Additionally, Morgan is a self-proclaimed cybercrime expert, with her Linkedin profile claiming she is “currently focused on building software that combats the rampant increase in fraud and cybercrime.” With high-level knowledge on how to counter cybercrime, it’s not inconceivable that Morgan would possess knowledge of how to bypass Bitfinex’s defenses. 

More shockingly, Morgan appears to have connections with BitGo, the wallet solution provider for Bitfinex at the time of the 2016 hack. In a 2020 Forbes article, Morgan discussed ways to protect businesses and clients from cyber criminals with BitGo’s Chief Compliance Officer, Matt Parrella. While Parrella only held his position as BitGo between July 2019 and November 2020, the fact that Morgan was in contact with BitGo employees and seen as an authority on cyber security after the Bitfinex hack took place raises several red flags. 

As mentioned previously, Morgan’s love for social engineering could also factor into her involvement in the Bitfinex hack. Suppose Morgan had access to, or was in contact with Bitfinex or BitGo employees prior to the hack. In that case, she could have used her social engineering techniques to gain access to private or sensitive information that aided the heist, if she and Lichtenstein were indeed involved. 

However, while evidence suggests that the couple had the competence to pull off the Bitfinex hack, it doesn’t mean they were the ones responsible. Court documents released Tuesday provide more insight into the pair’s money laundering activities, and reveal some embarrassing mistakes that are uncharacteristic of supposed multi-billion dollar hackers. 

The most obvious evidence against Lichtenstein and Morgan’s involvement in the initial theft of funds from Bitfinex is that the U.S. Department of Justice has not yet charged them with such a crime. The two charges currently brought against the pair are conspiracy to commit money laundering and conspiracy to defraud the U.S. If authorities had evidence to suggest Lichtenstein and Morgan were behind the Bitfinex hack, there would likely be an additional charge of Grand Larceny in the first degree. 

Furthermore, the same documents revealed that Lichtenstein had kept the private keys to the wallets containing the stolen cryptocurrency unencrypted on a cloud storage service. It seems strange that a self-professed cybersecurity expert and data analyst would have such poor operation security for wallets containing large amounts of stolen cryptocurrency. 

Authorities connected email addresses used by Lichtenstein and Morgan on an Indian crypto exchange to a Bitcoin address tied to the stolen funds. Law enforcement then got a warrant to access Lichtenstein’s cloud data account, quickly revealing him to be in possession of addresses containing the stolen funds. If Lichtenstein hadn’t made the mistake of signing up for his cloud storage account using the same identity as he used for the Indian exchange, it is likely he and Morgan would have evaded detection.

Image showing how authorities connected the stolen Bitcoin to Lichtenstein and Morgan. Source: DoJ

A final point against Lichtenstein and Morgan’s involvement in the hack is how the pair were cashing out their ill-gotten gains. The couple had used Walmart gift cards, Uber, Hotels.com, and the PlayStation store to cash out small amounts of their fortune, in addition to withdrawing funds from Bitcoin ATMs around New York to purchase gold bullion. Overall, the vast majority of Lichtenstein and Morgan’s wealth was inaccessible to them. It again makes little sense that the pair would go to great lengths to steal so much cryptocurrency without having a viable plan to cash it all out. 

Further developments in the case will likely shed more light on the situation and reveal if Lichtenstein and Morgan’s arrests were part of a wider, more sophisticated operation. The one thing that seems clear is to expect the unexpected—just because the situation is already absurd doesn’t mean the truth can’t turn out to be even wilder. 

Disclosure: At the time of writing this feature, the author owned ETH and several other cryptocurrencies. 

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Meet The Two Alleged Bitfinex Hackers: Ilya Lichtenstein and Heather Morgan

The recovery of the stolen BTC from the 2016 Bitfinex hack was the news of the day.  That story’s protagonists, though, they’re legends in the making. You can already tell that Ilya Lichtenstein and Heather Morgan will live forever in meme form. The story is so unlikely that many people in the Bitcoin community are doubtful that it happened as reported. 

Related Reading | Bitcoin Stolen From Bitfinex Hack Moved For The First Time In Five Years

Could this tech entrepreneur and this writer/ rapper have hacked a cryptocurrency exchange? Or are they just the money launderers for a bigger operation? And, did they really save the private keys to billions in BTC on the cloud? Or were they set up? Is law enforcement playing tricks on the public or are they the heroes of the day? 

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We can’t answer those questions at the moment. What we can do is explore the Bitfinex hackers’ social media to get a sense of who they are. But first, a summary.

What’s The Bitfinex Hack All About? And, Why Is It Relevant Now?

The “Statement Of Facts” available at the justice.gov website does a good job setting the stage: 

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“In or around August 2016, a hacker breached Victim VCE’s security systems and infiltrated its infrastructure. While inside Victim VCE’s network, the hacker was able to initiate over 2,000 unauthorized BTC transactions, in which approximately 119,754 BTC was transferred from Victim VCE’s wallets4 to an outside wallet (Wallet 1CGA4s5 ). At the time of the breach, 119,754 BTC was valued at approximately $71 million. Due to the increase in the value6 of BTC since the breach, the stolen funds are valued at over $4.5 billion as of February 2022.“

That money ended up in a Bitcoin address associated with Ilya Lichtenstein and Heather Morgan, but notice that law enforcement never says they’re the Bitfinex hackers. In fact, the couple has only been charged with money laundering. But, what’s the story here? Our sister site Bitcoinist does a good job thickening the plot

“The suspects were arrested in Manhattan, New York. Deputy Attorney General Lisa Monaco called the arrest, one of the largest in terms of financial seizure in history.

In that sense, the government official stated that Bitcoin and cryptocurrencies are not a “safe haven” for criminals. The statement contradicts others made by public officials, such as Senator Elizabeth Warren, which have emphasized the alleged use of crypto in criminal activities. Monaco added:

“In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter what form it takes.”

Who Is Dutch Ilya Lichtenstein?

Reportedly, Ilya Lichtenstein is a tech entrepreneur and YCombinator alum. In his Twitter, he defines himself as a “Human angel investor, web3 developer, serial entrepreneur.” In his most crucial tweet, Dutch criticizes a New York Magazine article by saying, “Oh god no. So many words about posering on Twitter, almost nothing about how to secure your keys, send a transaction or get a Defi loan.”

Does that seem like the Bitfinex hacker to you? Or, more importantly, does that seem like a person who would store his private keys in the cloud? We wouldn’t know. However, the justice.org report says:

“On January 31, 2022, law enforcement gained access to Wallet 1CGA4s by decrypting a file saved to LICHTENSTEIN’s cloud storage account,8 which had been obtained pursuant to a search warrant. The file contained a list of 2,000 virtual currency addresses, along with corresponding private keys. Blockchain analysis confirmed that almost all of those addresses were directly linked to the hack.”

In any case, in an article titled “Rethinking the Ethereum Wallet for Mass Adoption,” in the “People are terrified of hackers and malware” section, Ilya Lichtenstein says:

Related Reading | All Altcoin Innovations Will “Ultimately Benefit Bitcoin”: Bitfinex Whale

“The biggest threat to mass adoption is without a doubt, security. It’s still way too hard to properly secure plain text private keys without making a mistake along the way. We cannot expect mainstream users to be security experts in a world where the most common password is still “123456”. Security needs to be built in to the product by design, not left up the user.”

BTCUSD price chart for 02/09/2022 - TradingView

BTC price chart for 02/09/2022 on Oanda | Source: BTC/USD on TradingView.com

Who Is Heather Morgan AKA Razzlekhan?

Reportedly, Heather Morgan is a successful copywriter who grew her own business without outside investors. On her Twitter page, she defines herself as a “Serial entrepreneur. SaaS Investor. Razzlekhan. Surrealist Artist, Rapper & Fashion Designer with synesthesia. Also Forbes writer.” 

Her most crucial tweet says: “Good guiding compass to live by: How much of a POSITIVE IMPACT does your life have on others, including society & nature?”

The reason she’s much more interesting than her husband is her rap alter ego, Razzlekhan. Her videos are not available on YouTube anymore, but you can still listen to the songs on Soundcloud. And, some Twitter users captured clips of the videos before they disappeared:

Below, there’s another track. Above, there’s a sample of the couple’s Tik Tok content:

More interesting yet, though, is Morgan’s career as a Forbes writer. In her article titled “Experts Share Tips To Protect Your Business From Cybercriminals,” the supposed Bitfinex hacker says:

“Companies that didn’t already have distributed teams or work from home policies have struggled to transition to going fully remote amidst the pandemic.

Cybercriminals and fraudsters are taking advantage of this unexpected disruption, leading to a spike in scams and cybercrime.”

Wacky music aside, does that sound like a person who would launder money through gift cards registered under her real name? We wouldn’t know, but the justice.org report says:

“Records showed that portions of the $500 gift card were then redeemed through three transactions for personal items via the Walmart iPhone application. Each of the three redemptions were conducted online under MORGAN’s name, using one of MORGAN’s email addresses, and providing MORGAN and LICHTENSTEIN’s home address for delivery.”

What Does The Twitterati Think About The Alleged Bitfinex Hackers?

Bitcoin investor Alistair Milne questions the couple’s Opsec, “Imagine being a hacker (or money launderer) and keeping the unencrypted private keys to $3.5billion of Bitcoin in an online account linked to your name.” Bitcoin security expert Jameson Lopp questions their choice of location, “Imagine sitting on $4,000,000,000 in stolen bitcoin, knowing you’re being hunted by nation states, and deciding that NYC is a smart place to hole up.”

Featured Image: The alleged Bitfinex hackers from this tweet | Charts by TradingView


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‘Comedic rapper’ charged with involvement in Bitfinex hack out on bail

New York resident Heather Morgan, 31, claims to be many things: “a serial entrepreneur, prolific writer, irreverent comedic rapper, and investor in B2B software companies with high growth potential.”

But her LinkedIn bio doesn’t mention anything about her alleged capability to help launder hacked cryptocurrency.

Yesterday morning, FBI agents arrested Morgan — or was it her rapper alter-ego Razzlekhan?— and her husband Ilya Lichtenstein for allegedly conspiring to launder crypto connected to the 2016 Bitfinex hack that saw 119,756 Bitcoin (BTC) drained from the crypto exchange.

The pair have strongly proclaimed their innocence during a New York court appearance on Tuesday and were released on multi-million dollar bonds.

The 119,756 BTC stolen from Bitfinex was worth $72 million in Aug 2016, but is now valued at more than $5.1 billion. Since the 2016 hack, individuals connected to the stolen coins have periodically moved small amounts of BTC in separate transactions, leaving the bulk of the funds untouched.

The DoJ reported that it had traced 25,000 BTC of these transferred funds to financial accounts controlled by Lichtenstein and Morgan. Special agents were then able to gain access to and seize more than 94,000 BTC — worth $3.6 billion at the time — from Morgan and Lichtenstein after a search warrant allowed them to view files containing private keys to the wallet.

According to the DoJ complaint the pair are charged with laundering conspiracy and conspiracy to defraud the United States, however they are not charged with carrying out the hack itself. The first charge can be punished by up to 20 years in jail and the second by 5 years.

Weird AF

While Lichtenstein appears to be your run-of-the-mill tech entrepreneur, Morgan has a prolific presence on social media where you can find TikToks showcasing art pieces inspired by her Synesthesia, and her “WEIRD AF” music videos.

And you don’t want to miss those – they include gems like “I’m the grandmother you want to bang” Morgan, who is in her early thirties, raps this while sitting in a bathtub full of glitter during her song “Versace Bedouin.” The question is, how does one go from being a rapper to the focus of an FBI hacking investigation?

According to her LinkedIn, she started her career working as an economist in Asia and the Middle East, including post-revolutionary Egypt following the Arab Spring.

When she returned to California and eventually moved to Silicon Valley, she “became immersed in the tech startup scene. In 2009, she founded a B2B company called SalesFolk, which specializes in cold emails.

Although she didn’t get started with her rapping career until 2018, she was clearly practicing her lines for some time. The company’s slogan “be a goat, not a sheep!” has just the right balance of absurdity and cryptic philosophical reference that it’s a wonder it didn’t come straight from one of her tracks.

Related: DoJ seizes $3.6B in crypto and arrests two in connection with 2016 Bitfinex hack

Meanwhile, she was also racking up some bylines on business and tech publications, like her Dec 2017 article “Should your company worry about getting blacklisted” and her seemingly well-informed June 2020 piece “Experts Share Tips To Protect Your Business From Cybercriminals,” both of which were published on Forbes. She also has a lengthy author profile for Inc Magazine.


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DoJ Seizes $3.6B in Bitcoin From 2016 Bitfinex Hack

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The $3.6 billion sum makes it the Department of Justice’s largest financial seizure in history. 

DoJ Recovers Funds From Bitfinex Hack

U.S. officials have just confirmed the largest crypto seizure ever. 

The Department of Justice announced Tuesday that it had confiscated $3.6 billion in Bitcoin that was stolen from the Bitfinex exchange in 2016. 

It added that a New York couple had been arrested in connection to the Bitfinex hack and charged with alleged conspiracy to launder stolen cryptocurrency with a current value of $4.5 billion. The two individuals, Ilya Lichtenstein, 34, and his wife Heather Morgan, 31, have also been charged with alleged conspiracy to defraud the United States. They could face up to 25 years in prison if convicted. 

Discussing the seizure in a press release, Deputy Attorney General Lisa O. Monaco said that the incident was proof that “cryptocurrency is not a safe haven for criminals.” She criticized Lichtenstein and Morgan for their “futile effort to maintain digital anonymity” and added that the Department of Justice “can and will follow the money, no matter what form it takes.” 

Court documents allege that the couple conspired to launder funds from 119,754 Bitcoin that were stolen from Bitfinex in August 2016. A hacker compromised Bitfinex’s platform and sent over 2,000 unauthorized transactions and allegedly transferred the stolen Bitcoin to a wallet Lichtenstein had access to. 

The filings state that around 25,000 Bitcoin have gradually been moved from the digital wallet Lichtenstein controlled to other locations over the last five years, all of which Lichtenstein and Morgan control. The documents state that special agents accessed Lichtenstein’s files and uncovered the private key to the wallet the stolen Bitcoin was originally transferred to, meaning they had a way to access the remaining 94,000 Bitcoin. 

In a statement, Bitfinex said it would continue to cooperate with the Department of Justice and follow the necessary steps to get access to some of the proceeds from the Bitcoin. “Bitfinex intends to provide further updates on its efforts to obtain a return of the stolen Bitcoin as and when those updates are available,” the note read. 

Lichtenstein and Morgan are due to appear in court today. 

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