Bitfinex hack: One-half of NYC couple accused in $4.5B laundering case released on bail

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One-half of the couple that is alleged to have stolen over 119,000 BTC from the Bitfinex exchange in 2016 has been granted bail by a U.S. judge. The judge, however, denied bail to the man who is accused of having masterminded the heist, agreeing with prosecutors that he is a flight risk.

The U.S. Justice Department recently seized $3.6 billion worth of BTC in what it described as the largest financial seizure ever. As CoinGeek reported, the DoJ seized the digital currencies from a New York couple that it accused of having been behind the 2016 heist. The two, 34-year-old Ilya Lichtenstein and 31-year-old Heather Morgan, were arrested a week ago.

Heather has been released on bail, but her husband has been deemed a flight risk and will remain in custody.

Lawyers representing the two submitted an application for bail days ago and both were granted by a New York judge. However, Judge Beryl Howell of the U.S. District Court for the District of Columbia stayed the ruling on an emergency basis immediately after.

In a Monday hearing, Judge Howell granted bail to Heather, claiming that she was less likely to flee the country than her husband. The judge said that she believes Heather doesn’t have access to the BTC that the DoJ was unable to seize, which is worth about $300 million. She also noted that “the evidence strongly suggests that Mr. Lichtenstein has more facility and skill than Heather.”

The legal team representing the two had stated that they were unlikely to flee, arguing that had that been their goal, they would have done so when they learned about the government investigation targeting them. However, they stayed put in their New York residence until the day of their arrest.

Keeping them in custody would also greatly hamper and unfairly prejudice the couple’s ability to defend themselves. 

The lawyers further pointed out that Heather had undergone breast surgery on January 31. As such, she was much less likely to flee, and conversely, keeping her in custody would jeopardize her recovery.

For their part, the prosecutors argued that both had easy access to hundreds of millions of BTC, which the government had been unable to seize, giving them an easy way out.

“With hundreds of millions of dollars in cryptocurrency assets at their disposal, accessible from anywhere in the world with an internet connection, the defendants could easily finance a flight from prosecution,” they argued.

Prosecutors further pointed out that they had found financial accounts and phone numbers that the two had set up in Ukraine, as well as stolen identities, both male and female, for Ukrainian nationalities.

If convicted, the two would face 25 years in prison for cyber theft and conspiracy to launder money.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—a from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple,
Ethereum, FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.