Bitfinex hacker 'Razzlekhan' faces potential 18-month jail term for her role in crypto hack

United States Prosecutors are asking Heather Morgan, also known by her stage name "Razzlekhan" to spend 18 months in jail for her role in laundering 120,000 Bitcoins stolen from crypto exchange Bitfinex in 2016.

In a previous filing, federal prosecutors asked for judges to give Morgan a lenient sentence after her contribution to the case. Prosecutors also argued to give her a lighter sentence as she was a lower-participant relative to her husband and only spent a small fraction of what the pair stole.

Back in August 2023, Morgan pled guilty to money laundering and fraud charges and she faced a maximum combined sentence of 10 years in prison.

Prosecutors initially thought that Morgan was unaware of the digital assets her husbands had stolen. But it was later discovered that Morgan had actually aided him in laundering the funds and conspired to conceal his involvement.

Prosecutors had called Morgan's actions a conscious decision to engage in specific criminal activity by helping her husband launder millions in stolen funds for their personal gain, hence she is equally culpable of the crime as Lichtenstein was.

Prosecutors said that Morgan and Lichtenstein used a variety of technologically sophisticated means to launder the stolen Bitcoin, including the use of non-compliant crypto-exchanges, darknet markets, and crypto mixers to hide their trail.

Morgan also confessed to using part of the stolen funds to purchase physical gold coins which she had hidden in a secret location. But she later disclosed the hidden location to the authorities.

On top of her prison sentence, prosecutors are demanding Morgan to return the crypto assets seized by the government from the "Bitfinex Hack Wallet" as an in kind restitution to Bitfinex.7

The wallet contains about 95,000 BTC, 117,400 Bitcoin Cash (BCH), 117,400 Bitcoin Satoshi Vision (BSV) and 118,100 Bitcoin Gold (BTG) — valued at more than $6 billion.

Morgan's next hearing is scheduled for November 15.