Introduction

A New York couple, Ilya Lichtenstein and Heather Rhiannon Morgan, are facing charges for attempting to launder $4.5 billion in bitcoin that was stolen in a 2016 hack of Bitfinex. Recent developments suggest they are likely to plead guilty in the case.

New Charges and Plea Hearings

Lichtenstein and Morgan have been newly charged with a document called an “information.” This document indicates that the defendants have agreed to plead guilty. They have been ordered to appear in court on August 3 for separate arraignments and plea hearings related to the information.

The specific charge or charges mentioned in the information have not been disclosed. It is common for informations to have fewer or different charges than those originally filed against the defendants.

Deadline for Plea Paperwork

Judge Colleen Kollar-Kotelly has instructed prosecutors and defense lawyers to submit plea paperwork, including details such as the charged offense, statutory provision, elements of the offense, and penalties, by Thursday.

Previous Charges and Negotiations

Lichtenstein and Morgan were initially charged in February 2022 with money laundering conspiracy and conspiracy to defraud the United States. They pleaded not guilty to those charges. Prosecutors have been engaged in plea negotiations with the couple since their arrests.

Court Proceedings and Seizure of Stolen Bitcoin

The couple’s court appearances and status hearings have been repeatedly postponed. The recent filing of the new charging document led to the cancellation of a scheduled status hearing. Lichtenstein and Morgan are accused of attempting to launder the proceeds from the theft of 119,754 bitcoin from Bitfinex’s platform in 2016. However, they were not charged with the actual hack of the cryptocurrency exchange.

At the time of their arrests, the Department of Justice was able to seize over 94,000 bitcoin linked to the hack, worth approximately $3.6 billion. This seizure marked the largest financial seizure in DOJ history. The stolen bitcoin was initially valued at $70 million but significantly increased in value over the years.

The DOJ stated that around 25,000 of the stolen bitcoin were transferred from Lichtenstein’s wallet through a complex money laundering process, eventually ending up in financial accounts controlled by Lichtenstein and Morgan.

Conclusion

The U.S. Attorney’s Office in Washington is prosecuting the case against Lichtenstein and Morgan. Netflix has even announced plans to produce a series based on the couple’s story.