Bitfinex Hack Launderer Heather ‘Razzlekhan’ Morgan Sentenced to 18 Months in Prison

WASHINGTON, D.C. — Heather “Razzlekhan” Morgan, who helped launder the proceeds of the 2016 Bitfinex hack led by husband Ilya “Dutch” Lichtenstein, has been sentenced to 18 months in prison in the incident that drained almost 120,000 bitcoin from the exchange.

Her husband, who’d conducted the 2016 hack, was sentenced to five years last week for his role in the crime. The couple later laundered as much as a fifth of the ill-gotten bitcoin, according to authorities. Prosecutors had recommended an 18-month sentence for Morgan, who is widely known by her former rapping name, Razzlekahn.

“I am extremely sorry and deeply regret the choices I made,” Morgan said in a tearful statement she made during a sentencing hearing on Monday. “I used my time and energy to do harm instead of good, and I’m ashamed of that.”

Judge Colleen Kollar-Kotelly of the U.S. District Court of the District of Columbia said Morgan’s actions were deliberate and involved “extensive planning” during the hearing.

“These are serious offenses,” the judge said. “You were true partners in this laundering scheme … You did not stop voluntarily but stopped when you got arrested.”

The couple was arrested in February of 2022. Lichtenstein eventually admitted to orchestrating the theft, and Morgan also pleaded guilty to one count of money laundering conspiracy and one count of conspiracy to defraud the United States.

Morgan asserted that she wasn’t aware of the theft until after it had happened. But she was accused by authorities of helping using complex methods to try to conceal the sources of the cashed-out tokens, including depositing funds into darknet markets, “chain hopping” in converting the assets to other tokens, sending it through cryptocurrency mixing services, exchanging some of the assets into gold coins and using U.S. business banking accounts to seek to legitimize the money.

Her parents and friends from as far as Dubai and Hong Kong awaited her sentencing in the Washington courtroom on Monday. Many of them had made a case for leniency with the judge, who acknowledged Morgan had a lot of support and was a relatively minor and remorseful player in the Bitfinex crimes. But the judge said she had to be conscious of the sentence as a deterrent in a crypto sector that’s seen a lot of criminality.

Morgan’s lawyer said his client has had her reputation “completely and utterly” destroyed in the past couple of years, largely due to the public’s interest in her rapper persona that he dismissed as her “playing a character.” He asked that her punishment be limited to the 17 days she served in jail and the home confinement she’s lived under since then.

But the prosecution noted how deeply involved she was in seeking to conceal and use the millions her husband stole, sharing examples of her subterfuge, including personally burying gold coins acquired with the cryptocurrency.

“She was the one that dug the hole,” a lawyer for the prosecution said. “She jumped into the conspiracy.”

Morgan wept as she expressed remorse for her part.

“The harm I’ve caused will haunt me for the rest of my life,” she said.

Hours later, she posted a video on X saying she’d been silent while the criminal case was working through the courts, but she’ll soon be telling more of her story. “Razzle Dazzle!” she closed the video, jumping back into her Razzlekahn persona.

The judge gave her until at least the end of January before she’ll have to report to prison, though no date has yet been set.

Cheyenne Ligon contributed reporting.

UDPATE (Nov. 18, 2024, 19:05 UTC): Adds judge’s comments.

UDPATE (Nov. 18, 2024, 20:55 UTC): Adds comments from Morgan and the lawyers on both sides.

UDPATE (Nov. 18, 2024, 21:54 UTC): Adds posting of video message.