Couple Agree to Plea Deal in US for Alleged Bitcoin Money Laundering

According to a court filing and an individual familiar with the situation, a rapper active on social media, who referred to herself as the “Crocodile of Wall Street,” and her spouse have come to an agreement with prosecutors in a case related to the laundering of billions of dollars worth of stolen Bitcoin.

Heather Morgan and Ilya Lichtenstein are scheduled to appear for an arraignment on Aug. 3, more than a year after they were charged, according to Friday in federal court in Washington. The pair were arrested in February 2022, but asked for a delay in their case to facilitate plea negotiations, which could indicate they are cooperating with authorities.

While the court filing did not provide details on the pending claims, U.S. District Judge Colleen Kollar-Kotelly ordered the parties to submit documents for the hearing by July 27, along with “a copy of the plea agreement.”

Defense attorneys for Morgan and Lichtenstein did not respond to requests for comment, nor did U.S. Justice Department prosecutors.

The government accused the couple of conspiring to launder 119,754 Bitcoins that were stolen after the 2016 hack of cryptocurrency exchange Bitfinex. They allegedly used fake identities to set up online accounts and hid traces of transactions by depositing and then withdrawing stolen funds from virtual currency exchanges and darknet markets.

According to the government, some of the money redeemed from Bitcoin machines was used to buy NFTs, gold and a Walmart gift card, among other things. However, prosecutors did not charge the couple with actual hacking.

Morgan, who also called himself “Razzlekhan,” appeared on social media rapping about investment strategies and calling himself a risk-loving moneymaker who was “sly as a gator.” Lichtenstein, who went by the nickname “The Dutchman,” markets himself as an angel investor in tech companies, according to his LinkedIn profile.

At the time of the Bitfinex hack, Bitcoin was trading at less than $1,000. By the time they were arrested in February 2022, it had exceeded $44,000, bringing the value of the stolen property to approximately $4.5 billion, of which $3.6 billion had been recovered by authorities. Since then, Bitcoin has fallen to around $30,000.

The case is US v. Lichtenstein, 23-cr-00239, US District Court, District of Columbia (Washington, DC).