More than 1,00,000 Bitcoin, US $4,000,000,000, one of the biggest crypto hacks in the world, hackers and money untraceable for nearly 6 years… Sounds like a major heist, doesn’t it?
BitFinex was hacked in 2016 and millions of dollars worth Bitcoin was stolen.
The US Department of Justice has caught up to the hackers, arrested them and come in possession of the world’s largest crypto-holding wallet. But can you imagine who carried out such a sophisticated heist – perhaps state actors from North Korea or Russia, or some big mafia connection, shrouded in mystery and a black hoodie with no face?
All guesses are WRONG in this case!
The Crypto world has proved to be even more surreal and crazy than ever before. The hackers behind the 2016 Bitfinex hack are a TikTok girl named Heather Morgan who made cringey rap videos, and her husband of dual nationality – Russia and the US, who ran ‘cloud services and solutions business’.
This is who stole 120k from the bitfinex hack https://t.co/CixE4XLbzj pic.twitter.com/Qm4dBeDq0I
— RSN (@puttinyadown) February 8, 2022
— Mr. Whale (@CryptoWhale) February 9, 2022
The US DoJ arrested 31-year-old Heather Morgan and her husband 34-year-old Ilya Lichtenstein in the 2016 BitFinex hack. More than the movie plot-like-story behind the hack and the recovery, netizens are going gaga over Heather Morgan.
Heather Morgan has become an instant hit among netizens in the hack story due to her unique online persona, unlike anything anyone would have ever imagined a hacker to be. Heather made rap videos on YouTube, TikTok and elsewhere under the name Razzlekhan. She also gave speeches on growing businesses and called herself a ‘serial entrepreneur’ and an ‘angel investor’. She described her art as ‘surreal’, her genre as ‘horror-comedy, with a splash of weird allure’.
Heather Morgan’s profile on Forbes.
Before this, she also worked for Forbes as a writer between 2017 and 2021. Her Forbes bio reads: When she’s not reverse-engineering black markets to think of better ways to combat fraud and cybercrime, she enjoys rapping and designing streetwear fashion.
Oh well! Heather thought of better ways to combat fraud and cybercrime, and here she is getting charged with money laundering and defrauding in the US.
Her husband Ilya Lichtenstein is also a one-of-a-kind character. His Twitter profile, as netizens dug out, shows him being in the ‘cloud services and solutions business’. And incidentally, the US feds found the keys of over 2,000 crypto wallets stored on a cloud service! Way to go hiding that exploit!
— 0xFarming (@0xFarming) February 8, 2022
Netizens are also sort of worried about the safety of crypto exchange platforms, if a TikToker can exploit security flaws and steal millions and billions of dollars.
If you think a TikTok girl with 3.5 billion dollars of Bitcoin that was stolen from Bitfinex is peak-crypto stupid…It’s about to get a whole lot DUMBER. Idiocracy secured. pic.twitter.com/rsAuEvJQVk
— Bitfinex’ed ? (@Bitfinexed) February 9, 2022
I had a hardest time learn basics of python on udemy while this is the person who hacked 4bn from Bitfinex.Im literally fucking over this life https://t.co/GLIaTH5l4i
— Adam (@abetrade) February 8, 2022
WHAT IS THE CASE?
In 2016, hackers exploited a security breach in BitFinex, a Hong Kong-based popular cryptocurrency exchange platform, and gained access to the exchange. They were able to authorise over 2,000 unapproved transactions, stealing 119,754 $BTC, then worth about $72 million. It sent the Bitcoin prices tumbling by nearly 40%.
Since then, the stolen Bitcoin moved around, but no one was able to trace it to the owners or the hackers.
HOW DID THE FEDS FIND OUT?
Investigators for multiple US law enforcement agencies followed the stolen funds to accounts on the darknet AlphaBay. From there, they followed the money through a ‘labyrinth of virtual currency exchanges and wallets based in the US and abroad’.
When the hackers tried to move around the money, crypto exchange platforms became suspicious of the source and started asking questions. Some of the funds were also frozen. Finally, the feds traced the exchange accounts to India-based emails, linked to the business and personal accounts of two people Ilya Lichtenstein and his wife Heather Morgan.
This story starts with the infamous Bitfinex hack. In August 2016, a (still unknown) hacker gained access to the exchange, allowing them to authorize around 2000 unapproved transactions.They stole 119,754 $BTC, then worth about ~$72 million. It tanked the market by nearly 40% pic.twitter.com/m7VF4MxSEY
— Jack Niewold (@JackNiewold) February 8, 2022
A court-authorised search warrant of online accounts held by the couple led the Feds to a cloud account with private keys to over 2,000 wallets stored in it.
So far, the Feds have seized 94,000 Bitcoin worth over $3.6 billion. This has made it the department’s first biggest financial seizure to date. The rest of the Bitcoin was laundered by the hacker couple, some of it transferred to their own personal accounts.
— dailo.eth (@haidagwei) February 8, 2022
The couple was able to launder only a fraction of the stolen Bitcoin, and while they were billionaires on paper, they were not able to use much of these funds. Earlier, two Israeli brothers were arrested for their alleged involvement in the crime.
Now, the crazy rapper Razzlekhan and her husband face charges of money laundering and defrauding the US, that amounts to 20 years and 5 years of imprisonment, if found guilty.