A New York judge granted bail for two people accused of laundering billions of dollars worth of Bitcoin stolen in a 2016 hack of the Bitfinex currency exchange.
A New York judge granted bail for two people accused of laundering billions of dollars in Bitcoin stolen in a hack of the Bitfinex exchange in 2016. Ilya Lichtenstein and Heather Morgan appeared in a lower federal courtroom in Manhattan on Tuesday after they had been arrested in New York at 7 a.m. The US government said it seized about $3.6 billion worth of cryptocurrency from the married couple, the largest financial repossession ever. The two allegedly colluded to launder 119,754 Bitcoin, currently valued at about $4.5 billion, stolen after a hacker hacked into Bitfinex’s systems.
The government initially asked the judge not to release them on bail. Each of them faces the possibility of up to 20 years in prison, so they have the motivation to flee, a prosecutor told the judge. When the judge indicated that she would provide bail, the government requested that it be set at $100 million, an amount that one of the defense attorneys called “laughable.”
The judge set Morgan’s bail at $3 million and asked her parents to put up their home as security. For Lichtenstein, bail was set at $5 million.
Lichtenstein, 34, has dual US and Russian citizenships. He was wearing jeans and a gray shirt in court, his brown hair was a little tousled and he had a tummy tuck. Morgan, 31, appeared in court in a white hooded sweatshirt, her long hair down. They both wore masks, as did everyone else in the room, according to court requirements.
They watched the magistrate as she read them their rights. Neither spoke publicly during this first appearance. Their lawyers — they’ve kept separate counsel — spoke in court.
Morgan, an Oregon native and raised in California, has foreign ties, the prosecutor said. She has lived in Hong Kong and Egypt and is studying Russian, according to her social media. She is a journalist and economist and according to the government travels internationally for her work. Her father is a retired US government biologist and her mother worked as a librarian. Morgan’s parents were in court on Tuesday.
Lichtenstein moved to the US at age 6 to escape religious persecution. He grew up in the suburbs of Chicago, where his mother was a biochemist at Northwestern University. His father worked for Cook County. His parents were also willing to put up their house as surety.
They have been a couple since 2015, according to the government. They are on trial in Washington, where the charges were filed.
Lichtenstein’s lawyer said his client did not flee despite being fully informed of the investigation for months after being notified by an internet service provider in November. His attorney also said there was no evidence against Morgan.
But prosecutors argued that they should not be released, noting that the defendants used false identities in their crimes. Lichtenstein had a folder called “personas” and a file on a computer called “Passport_ideas” containing links to false identifications and passports, the government claimed. A search of their apartment found a plastic bag under the bed marked “burner phones,” a prosecutor said.
A lawyer for the defendants, Anirudh Bansal, declined to comment on the case outside the Manhattan courtroom.