Feds want Bitfinex hacker ‘Razzlekhan’ jailed for 18 months

United States prosecutors want Heather Morgan, also known as the rapper “Razzlekhan,” to spend 18 months in jail for her role in laundering 120,000 Bitcoin stolen from the crypto exchange Bitfinex in 2016. 

In an Oct. 9 filing, federal prosecutors asked that Morgan be given a more lenient sentence after she provided “substantial assistance” in her and her husband Ilya Lichtenshtein’s plea bargain in July 2023. 

Prosecutors also argued for a lighter sentence for Morgan as she was a “lower-level participant” relative to Lichtenshtein and noted that she had only spent a “small fraction” of what the pair stole.

Morgan pled guilty to money laundering and fraud charges in August 2023 for helping launder the Bitcoin (BTC) — currently worth $7.2 billion. She faces a maximum combined sentence of 10 years in prison.

Morgan and Lichtenstein were initially believed to have only been responsible for laundering the funds stolen in the 2016 Bitfinex hack. However, Lichtenstein later admitted to being behind the hack and pled guilty to money laundering charges. 

Lichtenstein pled guilty to one count of conspiracy to commit laundering and faces a maximum sentence of 20 years in prison. 

Government prosecutors said that Morgan was “initially unaware” of how Lichtenstein had obtained the 120,000 BTC, but by early 2020, Lichtenstein told her he was responsible for the hack, and she aided him in laundering the funds and conspired to conceal his involvement. 

“[Morgan] made a conscious decision to engage in specific criminal activity, helping her husband launder millions in stolen funds for their personal gain,” said the prosecutors in the filing. 

“It was not a momentary lapse or impulsive decision: the defendant consciously participated in the money laundering conspiracy and conspiracy to defraud over the course of years,” prosecutors added.

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Prosecutors added that both Morgan and Lichtenstein used a “variety of technologically sophisticated means” to launder the stolen Bitcoin, including the use of non-compliant crypto exchanges, darknet markets, and crypto mixers to obfuscate their paper trail. 

The government also said Morgan used some of the stolen funds to purchase physical gold coins, which she buried at a “secret location” that has since been disclosed to the authorities. 

On top of Morgan’s 18-month sentence, prosecutors have asked that the court order her to return the crypto assets seized by the government from the “Bitfinex Hack Wallet” as an in-kind restitution to Bitfinex. 

The wallet contains around 95,000 BTC, 117,400 Bitcoin Cash (BCH), 117,400 Bitcoin Satoshi Vision (BSV), and 118,100 Bitcoin Gold (BTG) — valued at more than $6 billion.

Morgan’s sentencing hearing is scheduled for Nov. 15, the day after Lichtenstein is set to be sentenced on Nov. 14. 

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