Amazon MGM Studios has just started the creation of a feature film to play the real events behind the hack of the Bitfinex exchange in 2016. The Bitfinex hack which involved over 2,000 transactions saw the theft and siphoning of a whopping 120,000 bitcoin – one of the highest crypto theft and laundering cases. The movie which is now in the works is called “Razzlekhan” and looks to place the spotlight on how Illya Linchtenstein and Heather Morgan assisted in concealing the traces of 94,643 BTC related to the notorious hack.
A Throwback to the Notorious 2016 Bitfinex Hack That Put Everyone on Edge and Now Inspired a Movie
August 2, 2016, was a red letter day for the Hong Kong-based cryptocurrency exchange Bitfinex and the whole industry after hackers broke in and carted away approximately 120,000 bitcoins. The stolen bitcoins at the time were worth over $71 million, but later worth over $4 billion as of the arrest of the two most prominent actors in the criminal venture.
Blockchain analytics firm Elliptic observed that the 119,756 BTC stolen from Bitfinex were initially transferred to a single wallet. There weren’t any major transactions until April 2021 when 12,241BTC of the funds worth $774 million were moved in a bid to cash out from the soaring price of Bitcoin at the time. This was the temptation that led to the tracing and apprehension of the two biggest actors in the laundering process.
Love birds Llya Linchtenstein and Heather Morgan were two of the major masterminds in the Bitfinex heist. Although it wasn’t categorically stated that they were directly responsible for the hack, the two came into the limelight for their laundering and concealment efforts.
At the time they were arrested in 2022, a New York Times article described them as Bitcoin’s Bonnie and Clyde. “…Could this goofy young couple have been Bitcoin’s Bonnie and Clyde?” asked the article in the introductory part of the piece analyzing the money laundering case that took the internet by storm.
Their arrest was a product of combined investigative efforts by the IRS Criminal Investigation, HSI (Homeland Security Investigation) New York, Field Office’s Cyber Crimes Unit, FBI’s Chicago Field Office, and the assistance of the Ansbach Police Department, Germany.
The movie “Razzlekhan” will focus on the activities of this couple concerning the crime, the circumstances that led to their arrest, and how it later played out. After a long six years following the hack, the unsuspecting couple was traced through blockchain tracing techniques and brought into custody in February 2022.
Describing the event, Deputy Attorney General Lisa O. Monaco said the 94,000 BTC ($3.6B) seizure was the department’s largest at the time and proof that “cryptocurrency is not a safe haven for criminals”.
Sentencing the Bonnie and Clyde of Bitcoin
Lichtenstein and Morgan were later charged with conspiracy to commit money laundering, which according to the law, meant a maximum sentence of 20 years behind bars. They were also charged with conspiracy to defraud the United States – which implies another 5 years behind bars. Their total sentence was to be determined by a Federal court using US sentencing guidelines.
Fast forward to August of 2023, after over a year of court proceedings, the couple, made their pleas. Lichtenstein (35) pleaded guilty to conspiracy for money laundering. Morgan (33) pleaded guilty to a count each of money laundering conspiracy and conspiracy to defraud the US, each carrying a maximum penalty of 5 years behind bars.
As we look forward to the “Razzlekhan” movie, the story of Bitcoin’s Bonnie and Clyde is yet another reminder that crime committed via cryptocurrency is very traceable. The Silk Road saga is also another prominent example of how criminals can be traced and apprehended even when they hide behind crypto.