US prosecutors are seeking an 18-month jail term for Heather Morgan, known as rapper “Razzlekhan,” for her involvement in laundering 120,000 Bitcoin stolen from Bitfinex in 2016. They filed a request on Oct. 9, asking for leniency due to the substantial assistance Morgan provided after entering into a plea bargain in July 2023 alongside her husband, Ilya Lichtenshtein.
The prosecutors also argued that Morgan should receive a lighter sentence as she was considered a “lower-level participant” compared to Lichtenshtein and had only spent a small fraction of the stolen funds. Morgan pleaded guilty to money laundering and fraud charges in August 2023, and faces a maximum combined sentence of 10 years in prison.
Morgan and Lichtenstein were initially thought to be involved only in laundering the funds stolen in the 2016 Bitfinex hack. However, Lichtenstein later admitted to orchestrating the hack and pleaded guilty to money laundering charges. He faces a maximum sentence of 20 years in prison.
The government prosecutors stated that Morgan was initially unaware of how Lichtenstein obtained the 120,000 BTC, but eventually became aware in early 2020 and conspired with him to launder the funds and conceal his involvement. They described her involvement as a conscious decision to engage in criminal activity for personal gain over the course of years.
Prosecutors also claimed that both Morgan and Lichtenstein used advanced methods to launder the stolen Bitcoin, including non-compliant crypto exchanges, darknet markets, and crypto mixers to obscure their paper trail. They also alleged that Morgan used some of the stolen funds to buy physical gold coins, which she buried at a secret location that has since been disclosed to authorities.
In addition to the 18-month sentence, prosecutors requested that the court order Morgan to return the crypto assets seized by the government from the “Bitfinex Hack Wallet” as 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, while Lichtenstein is set to be sentenced on Nov. 14.