Hipster ‘cryptocouple’ charged in billion-dollar bitcoin heist still have secret stash of $328 million and searched the dark web for phony passports, feds say

Hipster ‘cryptocouple’ charged in billion-dollar bitcoin heist still have secret stash of $328 million and searched the dark web for phony passports, feds say

Federal prosecutors say the hipster couple charged in one of the biggest bitcoin heists in history still have control over $328 million in stolen money, and had searched online for how to buy fake passports, making them serious flight risks.

U.S. authorities made the allegations in an appeal filing that sought to have Ilya Lichtenstein and Heather Morgan’s bond revoked. A federal judge in Manhattan ordered late Tuesday that the couple be released on bond — $5 million for Lichtenstein and $3 million for Morgan.

“The defendants are sophisticated cyber criminals and money launderers who present a serious risk of flight and should be detained pending trial,” prosecutors argued in a court filing to a judge in Washington, DC where the charges against the couple are filed.

“The defendants are sophisticated cyber criminals and money launderers who present a serious risk of flight and should be detained pending trial.”

— Court filing by the U.S. Attorney’s office for the District of Columbia

They were arrested Tuesday morning at their apartment on Wall Street on charges of conspiring to launder money and defraud the U.S. government and made their first court appearance in New York late Tuesday.

Attorneys for the couple argued in a court filing that the pair made no effort to flee after becoming aware they were under investigation in November and even after federal agents executed a search warrant at their home in January, seizing computers and their passports.

The lawyers also noted that as part of the couple’s bail conditions, their parents would both be required to put up their homes as security. They would also be placed in home confinement with electronic monitoring. The couple had also recently extended their lease for an additional year, their lawyers said.

Federal authorities say they seized $3.6 billion in bitcoin last week from crypto wallets the couple controlled. Prosecutors said they were able to access the wallets after finding crypto keys in the couple’s cloud-computing account following the execution of the search warrant. 

Prosecutors say the seizure was the largest in Department of Justice history.

The money was allegedly stolen by hackers in 2016 from the Bitfinex currency exchange. At the time, it was worth $71 million but has grown exponentially in value since then with the rise in the price for bitcoin.

But prosecutors say they have identified 24 other accounts containing $328 million in bitcoin which they have been unable to access and which they believe the couple control.

They also argued that the couple had previously searched on the dark web for how to procure false identification and passports, making them serious flight risks.

World travelers

The couple have long been major globetrotters. Morgan, 31, lived for extended periods in Egypt and Hong Kong and her social media pages detail extensive trips all around the world from Budapest to Bukhara.  

According to court papers, investigators seized the couple’s passports after executing a search warrant on their apartment on Jan. 5. Lichtenstein, 34, was born in Rostov, Russia and holds both U.S. and Russian passports. Morgan is a U.S. citizen.

The couple’s attorney argued that Lichtenstein and his family left Russia when he was a child to flee religious persecution and have lived in the suburbs of Chicago ever since.

At the time of the search, investigators say that Morgan attempted to lock her smart phone so agents couldn’t access it and that the couple immediately brought in lawyers. 

In conversations with authorities, the couple’s lawyers told investigators that Morgan was scheduled to undergo a medical procedure to remove a lump from her breast on Jan. 31. On Feb.1, authorities moved to seize the $3.6 billion from the couple’s crypto accounts, according to court filings. They were then arrested on Feb. 8.