A rapper who described herself as the 'Crocodile of Wall Street' has been arrested for allegedly laundering £3.3billion worth of stolen Bitcoin.
Heather Morgan, 31, and tech entrepreneur husband, Ilya "Dutch" Lichtenstein, 34, were arrested on Tuesday for allegedly laundering billions of pounds worth of the cryptocurrency after the Bitfinex exchange was hacked in 2016.
Morgan, who refers to herself as 'the infamous Crocodile of Wall Street' on her artist website, was arrested in the US over the £3.3billion heist.
The couple from New York allegedly transferred 119,754 worth of Bitcoin into a digital wallet controlled by the husband, a dual citizen of Russia and the US, after a hacker breached the cryptocurrency exchange and initiated over 2,000 unauthorized transactions, according to court documents.
At the time of the theft, 119,754 Bitcoin was worth around £52million. After years of cryptocurrency's value increasing, the amount is now around £3.3billion.
Federal officials were able to seize about 94,000 of the stolen bitcoin, with an estimated value of £2.6billion.
Federal officials say that this is the largest single seizure of funds to date, and the most high-profile case since the agency announced its initiative to investigate cryptocurrency crimes more seriously.
“Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals,” said Deputy Attorney General Lisa O. Monaco, calling the laundering a "futile effort to maintain digital anonymity.
"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.”
According to court papers, the pair allegedly only spent a portion of the stolen money.
Prosecutors said that what they did spend was on gold, NFTS, and "absolutely mundane things such as purchasing a Walmart gift card for $500."
Over the last five years, 25,000 worth of the bitcoin were transferred out of the wallet using a "complicated money laundering process" and into financial accounts controlled by the couple, prosecutors said.
The remaining funds - more than 94,000 bitcoin - allegedly stayed in the wallet used to store the illegal proceeds from the hack.
Though the stolen money is from Bitfinex, court documents do not accuse the duo of the hack itself - it has not been made clear if the pair is suspected of stealing the money.
"As the complaint alleges, the FBI and federal prosecutors were able to trace the movement of Bitcoin from this hack," said the U.S. Attorney for the District of Columbia Matthew Graves.
Graves also added that the money moved through a major darknet exchange called AlphaBay that has been tied to a host of crimes.
The government will seek to return the stolen funds to the rightful owners, according to officials.
“Bitfinex will work with the DOJ and follow appropriate legal processes to establish our rights to a return of the stolen bitcoin,” Bitfinex said in a written statement.
Lichtenstein, who has worked as a tech entrepreneur and describes himself in online profiles as an "angel investor,” was ordered to home detention on Tuesday with a wearable GPS and a £3.6million bond.
Morgan, who goes by the stage name Razzlekhan, is a part-time rapper and Forbes contributor who also ran an email marketing company.
She refers to herself as “the infamous Crocodile of Wall Street,” who is “more fearless and more shameless than ever before."
She was given the same sentence but with a £2.2million bond, according to CoinDesk.
In music videos set in the Financial District, Morgan dedicates her songs to “the entrepreneurs and hackers, all the misfits and smart slackers.”
Morgan and Lichtenstein now face charges of conspiracy to commit money laundering, which could mean up to 20 years in prison.
