The largest Bitcoin heist in recorded history is allegedly the work of New York City-based YouTube rapper Heather Morgan and her husband, business founder Ilya Lichtenstein.
Weeks passed while the couple, who were obviously unknown at the time of the robbery, spent time inside Bitfinex servers learning system commands to bypass the company’s security system.
The exchange’s daily withdrawal cap was then increased by the hackers from 2,500 Bitcoins to 1 million, more than enough to empty the whole vault, according to a Bloomberg piece about the bizarre episode.
This occurred at 10:26 am on August 2, 2016. Then, employing the private keys, they began broadcasting commands to transfer Bitcoins from Bitfinex to addresses under their control on the blockchain.
The improbable hackers took 119,754 coins in 3 hours and 51 minutes, which was more than half of Bitfinex’s total at the time.
The executives of Bitfinex recruited a private security firm to search the server memories for clues after realizing they had been somewhat played.
According to Bloomberg, the breach “was sophisticated and ambitious, and several users suspected an inside job.”
Finally establishing a link between the wallets and Lichtenstein and Morgan, both in their early 30s, was IRS agent operating out of his basement in Grand Rapids, Michigan.
According to Bloomberg, the pair doesn’t fit the criteria of a criminal mastermind and instead is described as follows:
Social media posts suggested that these two weren’t exactly criminal geniuses. Dutch Lichtenstein resembled a baby-faced Elijah Wood with his curly hair and sly smirk.
He appeared to be particularly fond of Clarissa, the couple’s Bengal cat. Morgan’s passion was music, particularly extravagantly terrible music that she composed, performed, and shared in videos on TikTok and YouTube.
The BitGo software, which Bitfinex started utilizing following a hack in 2015, was set up to automatically approve transactions under a predetermined limit, much like an ATM machine, but a Bitfinex executive had to approve higher withdrawals.
This indicated that, in theory, a hack would result in the theft of very few Bitcoins.
However, Lichtenstein and Morgan discovered a workaround for this problem: a computer command could be sent by someone with a Bitfinex executive’s electronic credentials to adjust the withdrawal threshold.
To obtain the necessary credentials, the couple utilized a “remote access Trojan” virus. The rest, as they say, is history.
After a protracted investigation, warrants to search cloud accounts, and a great deal of help from Chris Janczewski, the aforementioned IRS agent, Lichtenstein and Morgan were finally taken into custody.
After the pair’s arrest, Deputy Attorney General Lisa Monaco declared during a press conference that “Today, the Department of Justice has struck a major blow to cybercriminals looking to abuse Bitcoin.”
Online rapper Razzlekhan, who goes by Morgan, rose to fame on social media, and even major television networks joined in the fun.
In contrast to calling this rap, Daily Show presenter Trevor Noah remarked, “The Bitcoin offences are nothing.”
An update from NDTV on the couple’s situation is now available, and it’s almost as weird as the whole story:
Both of them entered a not guilty plea. Morgan was released on a $3 million bond while Lichtenstein remained in custody without bail.
She contended that because she had frozen embryos in New York and intended to utilize in vitro fertilization to conceive with Lichtenstein, she wasn’t a flight risk.
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When Morgan went back to her flat, she listed a lot of her possessions for sale on the building’s bulletin board in May, including three electronic deadbolts and a phoney Banksy print.
She’s relocating and needs to downsize, according to copies of the posts that a neighbour gave.
In a court filing dated May 30, prosecutors stated that they were negotiating a plea deal with the couple’s attorneys. August is the date of the subsequent hearing.
Regarding Janczewski, he quit the IRS in March 2022 and became the director of global investigations for the blockchain-focused TRM Labs.
The recovered bitcoin is still being held on thumb drives by the US Marshals in an unidentified location.
According to the report from NDTV, “almost a fifth of the missing Bitcoins are still unaccounted for.”
According to crypto-analysis company Elliptic Enterprises Ltd., about $70 million was sent to the Russian dark web site Hydra Market.
