Plea Talks Underway in NY $4.5B Crypto Laundering Case

A couple prosecutors say tried to launder $4.5 billion in cryptocurrency connected to the 2016 hack of crypto exchange Bitfinex are negotiating a possible plea deal with prosecutors, according to court documents.

Ilya “Dutch” Lichtenstein, 34, and his wife, Heather Morgan, 32, both of New York,  are accused of money laundering and conspiring to defraud the United States. The Justice Department alleges that after hackers broke into the exchange’s computers and transferred funds, Lichtenstein and Morgan set up a vast network of accounts so they could move stolen funds in amounts small enough to defy easy tracing.

The $4.5 billion figure was the result of the surge in cryptocurrency prices between the time of the alleged theft in August 2016 and the date the two were charged — Feb. 7, 2022. A government charging document states: “At the time of the breach, 119,754 BTC was valued at approximately $71 million. Due to the increase in the value of BTC  since the breach, the stolen funds are valued at over $4.5 billion as of February 2022.”

See also: PYMNTS Crypto Crime Series: Bitfinex Using $3.6B Seized in Hacking Arrests to Cover Shadow Banking Losses

The couple was scheduled to appear in U.S. District Court in Washington, D.C., on June 3 for what is called a status hearing. The government and defendants filed a joint motion Monday — Memorial Day — asking for an additional 60 days.

“The government has produced discovery totaling more than 1.1 gb to date, including voluminous financial records,” the filing stated, suggesting the defendants need time to review the material.

The joint document further states: “The parties respectfully request a continuance of approximately 60 days, until on or about August 2, 2022, to facilitate the discovery process and discussions regarding possible  resolutions of the case short of trial.”

A government lawyer also indicated that counsel for both defendants indicated their clients had agreed to waive their rights for a speedy trial.

A judge had not ruled on the motion as of late Tuesday (May 31).