The Big Dumb Bitcoin-Laundering Scheme (Feat. Bad Rap)

Heather Morgan, a.k.a. Razzlekhan, one of two arrested on Tuesday in a bitcoin-laundering scheme. Photo: Screenshot via YouTube

One of the biggest heists in U.S. history might also be one of the strangest, featuring a husband and wife couple with a penchant for posting cringe. On Tuesday morning, FBI agents arrested a husband and wife in Manhattan on charges of fraud and money laundering involving bitcoins stolen from an online cryptocurrency exchange six years ago. The Feds seized coins worth around $3.6 billion in cryptocurrency, which would make it not only one of the biggest known hacks but one of the largest robberies ever.

Ilya Lichtenstein, 34, and his wife, Heather Morgan, 31, are accused of moving 119,754 bitcoins hacked from the Hong Kong exchange Bitfinex, in 2016, through a series of crypto wallets in maneuvers that were allegedly designed to evade authorities. The couple is not accused of raiding the exchange. Lichtenstein and Morgan appeared in federal court on Tuesday morning and did not enter pleas, according to Lichtenstein’s attorney who declined to comment further.

The problem with a hack this big and notorious is that the cryptocurrency was soon blacklisted, meaning that whoever had it couldn’t redeem it for cash or trade it on reputable exchanges. According to the Feds, one of the few ways that they were able to actually use the money was by buying a $500 Walmart gift card. In fact, most of the digital currency was stashed in crypto wallets for years and hardly moved. The Feds caught Lichtenstein and Morgan after executing a search warrant for their computers and finding folders called “personas” and “passport ideas.”

Lichtenstein is a tech entrepreneur of a few minor companies, but Morgan — wow: She is a self-described “serial entrepreneur,” once-prolific Forbes contributor, and amateur rapper who calls herself Razzlekhan and has released tracks (via “WEIRD AF” music videos) about crypto and being an entrepreneur and a hot grandma. We got a look before the videos were set to private, and we’ve updated this post to include those that live on on social media.

There was a typical boast from Morgan’s song “Rap Anthem for Misfits and Weirdos”: “Razzlekhan’s the name / the hot grandma you really want to bang.” (The reference to being a grandma appears to be about her aesthetic.)

“Never been much for romance / rather do my jerk-off dance,” is the opening lyric to a song called “Pho King Badd Bhech,” which was allegedly “inspired by the real experiences faced by a female tech CEO in Silicon Valley and New York.”

In a 2019 Forbes post, Morgan said she discovered “an unrealized passion for rap” after suffering burnout as a business copywriter. (“Whether you’re writing an ebook on business best practices or working on a rap song, it’s best to go with the flow,” she advises in the piece.)

During the pandemic, Morgan began to lean into the influencer aesthetic, discussing how rapping can cure “CEO burnout” and posting clips of her method of “berazzling,” which involves painting Cole Haan loafers green and orange — a look she says was inspired by Christian Louboutin and “the movie The Joker.”

In a few bars rapping about the aesthetic, she boasts she is the “Turkish Martha Stewart,” who also quite famously got in hot water with the Feds over financial schemes, albeit after less rhyming.

The Big Dumb Bitcoin-Laundering Scheme (Feat. Bad Rap)