Ilya Lichtenstein Held in Bitcoin Case Whereas Heather Morgan Is Given Bail

WASHINGTON — A federal decide on Monday ordered the pretrial detention of a person charged with overseeing a sweeping scheme to launder billions of dollars of stolen Bitcoin whereas upholding a call by a New York decide to launch his spouse pending trial.

Chief Choose Beryl A. Howell of the Federal District Courtroom within the District of Columbia stated Ilya Lichtenstein, 34, a Russian émigré and tech investor, appeared to have vital motivation to flee, and might need sources to take action that investigators had neglected. However she dominated that his spouse, Heather Morgan, 31, an entrepreneur and a self-styled rapper generally known as Razzlekhan, met the standards for supervised launch.

Mr. Lichtenstein and Ms. Morgan had been arrested and accused of a scheme to launder the 119,754 Bitcoin stolen in a 2016 hack of Bitfinex, a cryptocurrency change primarily based in Hong Kong, putting them on the middle of a global financial mystery.

Investigators advised the decide that they’d discovered no proof the couple was concerned within the theft, however they offered a sprawling community of accounts by way of which they stated the pair was working to launder the funds.

The confiscation of the Bitcoin that remained in Mr. Lichtenstein’s pockets on Feb. 1, price roughly $3.6 billion on the time, was the Justice Division’s largest monetary seizure ever, officers have stated. The case has been seen as a watershed within the regulation and maybe investigation of the murky and infrequently illicit world of cryptocurrency.

In reviewing the case in opposition to the couple, Choose Howell appeared to conclude that Mr. Lichtenstein was more proficient in the kind of monetary sleight of hand wanted to launder the stolen funds and probably safe a future for the pair exterior the USA. Given what she described as a familiarity with false identities and ability at transferring monetary belongings discreetly, Choose Howell expressed concern that Mr. Lichtenstein was a flight threat.

A lawyer representing the couple denied that they’d ever deliberate to flee, citing their household ties in the USA, in addition to the truth that they’d embryos frozen in New York in hopes of conceiving a toddler, and that they’d not tried to depart the nation even after indications that they have been below investigation final 12 months.

However a prosecutor burdened that whereas the federal government had secured the majority of the stolen funds, the couple had been recorded transferring stolen cash between numerous cryptocurrencies and had the expertise with encrypted accounts essential to duck investigators in transferring belongings abroad.

Choose Howell expressed concern that Mr. Lichtenstein and Ms. Morgan have been being represented by the identical lawyer, particularly as she appeared to conclude that Mr. Lichtenstein’s involvement and planning far outweighed that of Ms. Morgan.

Though she stated the severity of the fees had elevated the motivation to flee “exponentially,” she left intact a earlier decide’s ruling that Ms. Morgan be launched on $3 million bond, posting her dad and mom’ dwelling as collateral.