Aug 3, 2023

New York resident Ilya Lichtenstein, who is the husband of Heather "Razzlekhan" Morgan, revealed himself as the hacker who executed an multi-million-dollar exploit of crypto exchange Bitfinex in 2016 while pleading guilty to money laundering conspiracy charges during his court appearance.

Video transcript

Ilia Lichtenstein, famously the husband of Heather Roshan Morgan in entering his plea deal, uh relating to some money laundering charges stemming from the bit for next hack a long time ago is now admitting that he was the hacker himself. Now, the charges were specifically around the laundering of those funds. The identity of the hacker was not known until now. And at this plea deal, we're getting a bit of a bombshell uh admission that IA Lichtenstein claims to have been the bit hacker a really foundational hack in Bitcoin's history. Throw this to David. He's been following this case put pretty closely over the years, David. What do you make of this? Yeah, I mean, this is huge to be clear. It was always fairly obvious that that Ilia and Raul Khan had actually conducted the hack. But as you mentioned in the charges, they were just being targeted for money laundering that is kind of processing and cleaning up the funds afterwards. But it was always really unclear why they would have been doing the laundering part without having done the hacking part in the first place. You know, people hypothesized that maybe they had bought the keys at a discount in order to then process it and all this stuff. But those were always kind of long shot theories and the thing that always made the most sense was that they were the hackers as well as the launderers. So this really resolves a big ambiguity that has been going on for a long time assuming it pans out, assuming that it's true. We haven't, we haven't seen all the details. I haven't read the story yet. I'm assuming this was an admission that was pursuant to his plea deal, which is, would be very interesting because presumably the plea deal is going to get him less of a sentence than a guilty verdict on the money laundering charges would have. And yet now he's admitting to a crime that actually would have implied a much longer sentence probably. And so there's a lot of things to, to figure out here in terms of how that information actually came out and what he's getting for it. Um But the, the admission itself is, is a big milestone and for those who might not know, I mean, this hack goes back to if I remember correctly, 2015 or 2016. So this is, you know, ancient history. And the final thing I'll say that makes this really interesting is that at the time of the hack, the value of what was extracted was on the order of less than $100 million I believe and then by the time they were arrested last year, that value had shot up to several billion dollars. So there's a very interesting case study here too about, you know, what are the legal consequences if you steal something that then becomes much more valuable within a few years? Uh So, Zach, I saw your hand go for it. Yeah, you're, you're right. It's 2016 and we're talking about 100 20,000 Bitcoins, right? So that's a staggering amount of money. Uh That was pilfered here by uh these two criminal masterminds who when the news initially came out and people started uh searching their social media profiles, specifically Heather Morgans in this instance, you know, she's this kind of spazzy female rapper who has all these weird sort of um I don't know, social engineering tricks that are on the internet over these, over these many years. So I think there was just this initial just all struck moment on crypto Twitter where it's like, wow, these spazzes executed a $5 billion bank heist. And now we're learning this some years later after the 2016 hack itself. So anyway, this is um yeah, this is a very interesting development in a case that really captivated people's interest. Uh when this news came out uh initially that they were involved, at least on the laundering side and now allegedly on the hack side itself, will I gotta throw it to you uh for your thoughts on this one. Yes, David. Correct me if I'm wrong on this. But I think there's some other important things about this whole hack as well. So going back to 2016 when the hack took place, bit fin was in a tight spot, obviously losing a lot of money and with no recourse in sight, they decided to launch a Leo Token which enabled them to gather some funds to be able to continue moving forward. And that was one of the first instances of an exchange token. I don't necessarily know if it was the first instance of an exchange token, but one of the bigger first instances of an exchange token, and we went on to see a lot of exchange tokens be launched including F TT, right, which famously took down FTX and Alameda research. So there's like some long tail thoughts behind this hack that really just weave their way in and out of crypto history in surprising ways. It's funny how one instance of a hack can lead to so many different stories down the line. The other thing I want to bring up here is just Rosal Khan in general. I mean, Zach, I think you put it mildly like she's definitely more than a rapper. Uh She's sort of an icon within crypto cringe history, right? With all the different uh youtube videos she put out there. She's up there with Mark Zuckerberg's sister as perhaps the first or second best crypto artist that slander will not stand. I'm with you. I'm not at all on this one team. Get, get out of immediately. It's if everyone has their own taste involved with the story. But I think at the very least I and ZK have a little bit of a marketing crisis on their hands because who's gonna go down in history as the bigger name one committed a huge hack. Maybe the largest hack in Bitcoin history. The other has some of the best videos uh on, on youtube Danny. I throw to you. Yeah, I, you know, I'm gonna have to pick Raza Khan on this one. The hack, the identity of the hacker is irrelevant when you have memes of such a high quality. That's what people are going to remember. Of course, they're gonna remember in connection to, you know, the multi billion dollar hack. Uh but the, the person who really brought this to the attention of the wider world at this point in time wasn't Ilia, it was Raza Khan. I say victory goes to Raza Khan. That's my, that's my thoughts on the matter should be noted that Heather Morgan's uh plea hearing is occurring now is still ongoing. So there could be some more developments out of this story soon. Something to watch for sure she could be, who knows there was some, there was some news in the Tupac case recently. So we'll have to think on that.

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