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HomeCryptocurrencyIlya Lichtenstein Held in Bitcoin Case Whereas Heather Morgan Is Given Bail

Ilya Lichtenstein Held in Bitcoin Case Whereas Heather Morgan Is Given Bail

WASHINGTON — A federal decide on Monday ordered the pretrial detention of a person charged with overseeing a sweeping scheme to launder billions of {dollars} of stolen Bitcoin whereas upholding a choice by a New York decide to launch his spouse pending trial.

Chief Choose Beryl A. Howell of the Federal District Court docket within the District of Columbia mentioned Ilya Lichtenstein, 34, a Russian émigré and tech investor, appeared to have vital motivation to flee, and might need sources to take action that investigators had neglected. However she dominated that his spouse, Heather Morgan, 31, an entrepreneur and a self-styled rapper often called Razzlekhan, met the factors for supervised launch.

Mr. Lichtenstein and Ms. Morgan had been arrested and accused of a scheme to launder the 119,754 Bitcoin stolen in a 2016 hack of Bitfinex, a cryptocurrency trade based mostly in Hong Kong, putting them on the heart of a worldwide monetary thriller.

Investigators informed the decide that that they had discovered no proof the couple was concerned within the theft, however they offered a sprawling community of accounts by which they mentioned the pair was working to launder the funds.

The confiscation of the Bitcoin that remained in Mr. Lichtenstein’s pockets on Feb. 1, price roughly $3.6 billion on the time, was the Justice Division’s largest monetary seizure ever, officers have mentioned. The case has been seen as a watershed within the regulation and maybe investigation of the murky and sometimes illicit world of cryptocurrency.

In reviewing the case towards the couple, Choose Howell appeared to conclude that Mr. Lichtenstein was more proficient in the kind of monetary sleight of hand wanted to launder the stolen funds and probably safe a future for the pair exterior the US. Given what she described as a familiarity with false identities and ability at shifting monetary belongings discreetly, Choose Howell expressed concern that Mr. Lichtenstein was a flight threat.

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A lawyer representing the couple denied that that they had ever deliberate to flee, citing their household ties in the US, in addition to the truth that that they had embryos frozen in New York in hopes of conceiving a toddler, and that that they had not tried to depart the nation even after indications that they had been beneath investigation final 12 months.

However a prosecutor careworn that whereas the federal government had secured the majority of the stolen funds, the couple had been recorded shifting stolen cash between numerous cryptocurrencies and had the expertise with encrypted accounts essential to duck investigators in shifting belongings abroad.

Choose Howell expressed concern that Mr. Lichtenstein and Ms. Morgan had been being represented by the identical lawyer, particularly as she appeared to conclude that Mr. Lichtenstein’s involvement and planning far outweighed that of Ms. Morgan.

Though she mentioned the severity of the fees had elevated the motivation to flee “exponentially,” she left intact a earlier decide’s ruling that Ms. Morgan be launched on $3 million bond, posting her dad and mom’ dwelling as collateral.

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