Heather Morgan Sentenced to 18 Months for Bitfinex Hack Money Laundering: Report

Heather Morgan, widely known by her rap persona “Razzlekhan,” has been sentenced to 18 months in prison for her role in laundering funds stolen during the 2016 Bitfinex cryptocurrency hack.

Morgan pleaded guilty to conspiracy charges related to money laundering and wire fraud in the United States earlier this year.

A deliberate scheme

According to a CoinDesk report, Judge Colleen Kollar-Kotelly of the US District Court in Washington, DC, described Morgan’s actions as calculated and intentional during the sentencing:

“These are serious crimes,” remarked the judge. “You were real partners in this money laundering scheme. . . . You didn’t stop voluntarily, you stopped when you were arrested.”

Although Morgan initially claimed he was unaware of the hack, authorities argued that his actions after learning about it demonstrated active involvement. She was accused of helping by using complex methods to conceal the origin of the stolen funds.

These included “chain hopping” by converting cryptocurrencies to different blockchains, using hashing services to anonymize transactions, depositing funds on darknet markets, and exchanging assets for gold coins .

Morgan also personally buried the gold coins. A prosecution lawyer stressed: “She was the one who dug the hole,” adding that she “jumped into the conspiracy.”

Her husband, Ilya “Dutch” Lichtenstein, who carried out the hack, received a five-year prison sentence last week. The theft involved nearly 120,000 Bitcoins, valued at $71 million at the time and worth billions today.

Repentance and appeals for mercy

Morgan expressed remorse during the hearing, tearfully addressing the court. “I am very sorry and deeply regret the choices I made,” he said. “The harm I have caused will haunt me for the rest of my life.”

Her lawyer argued that the 34-year-old’s public persona as “Razzlekhan” had subjected her to reputational damage, calling her rap career “a fictional character” misunderstood by the public. He asked that his sentence be limited to the 17 days he had already served in prison and the home confinement he has suffered since 2022.

Family and friends from Dubai and Hong Kong appeared in court to support him, pleading for leniency. The judge acknowledged Morgan’s support network, but emphasized the need to deter similar crimes in the crypto sector. He also noted the importance of holding individuals accountable, especially in an industry plagued by crime.

Morgan will report to prison in early 2024, the exact date of which has yet to be determined. Hours after the hearing, he posted a video online saying he would soon share his side of the story, having remained silent during the court proceedings.

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