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How Heather Morgan and Ilya Lichtenstein Pulled Off the Mother Of All Bitcoin Scams

Feb 16, 2022 7:46 AM 4 min read

“Bitcoin will become a lesson in economics textbooks of the classic bubble riddled with scams.”

So wrote Heather Morgan, an “expert” in cold emails and sales marketing strategies, in a 2014 blog post.

On Tuesday, US tax investigators arrested Morgan and her husband, Ilya Lichtenstein, in their New York home. Apparently, the couple was embroiled in a Bitcoin scam of their own. One that, at $3.6bn, has led to the “biggest financial seizure in Justice Department history”.



The “Bitcoin scam” refers to the hacking of the Hong Kong-based Bitfinex exchange in August 2016. 

While US officials have not charged Morgan and Lichtenstein with actually perpetuating the hack, they have accused them of being “engaged in extraordinarily complex laundering” of the Bitcoins stolen from Bitfinex. 

Large volumes of the digital currency stolen in 2016 were reportedly sent to digital wallets controlled by Lichtenstein and Morgan, who laundered the stolen coins and moved them around through “thousands of transactions to over a dozen accounts” in their own names and businesses. 



The Bitfinex hack, at the time, saw $71m of Bitcoins stolen. However, because the cryptocurrency’s price has skyrocketed since then, that stash is now worth $4.5bn, $3.6bn of which was recovered by agents this week.

This “Bonnie and Clyde” crypto scandal has taken the financial world by storm. Which is warranted, considering the hefty price tag and Bitcoin’s emerging place in the zeitgeist. 

However, the fascination of the “crypto couple” scam may also be because it’s happening right on the heels of the Elizabeth Holmes trial, the last big instance of a famous entrepreneur who fell from grace. As such, it is also evolving into a debate about new-age digital assets like Bitcoin and NFTs and about the risk-it-till-you-make-it attitude espoused by many influencers in the age of TikTok and social media.

Another reason for the lure, just as it was with Holmes, is the people on the stand themselves…


Meet the (Alleged) Scamsters

Morgan’s LinkedIn describes her as a “serial entrepreneur, prolific writer, irreverent comedic rapper, and investor in B2B software companies with high growth potential”.

She has degrees in economics and international relations, and built a profile throughout the 2010s as a marketing specialist and columnist for the likes of Forbes and Inc. She also developed a liking for meme stocks and a brazen social media personality - the latter of which she augmented with the help of her rapping side-hustle under the nickname Razzlekhan aka the “Crocodile of Wall Street” (“My tendies going global / Bitcoin, Ethereum HODL!”).

As for Lichtenstein aka “Dutch”, he reportedly has a degree in psychology and is a self-described “technology entrepreneur, coder and investor”. His name is associated with a string of ventures - most of them now defunct - including weight loss websites, an investment company, selling brain supplements that can “turbocharge your productivity”, and spearheading a fan site for former Republican Presidential candidate, avowed libertarian and crypto enthusiast Ron Paul. 

Lichtenstein also co-founded a marketing startup named MixRank, among whose early backers was Mark Cuban. Over the years, he garnered clout as an angel investor in up-and-coming startups alongside heavyweights like Scott Belsky, Aaron Levie and Marc Benioff.


Two Together

The couple met about a decade ago (the marriage proposal in 2019, true to style, was designed as a “weird, creative multi-channel marketing campaign” that comprised Razzlekhan posters slapped all over New York City, including a Times Square billboard). 

By 2016, they had built a considerable reputation in Silicon Valley and Wall Street circles. Her, a “shameless economist in pearls”, and him, a burgeoning investor rubbing shoulders with the who’s-who of the Bay Area. 

Morgan wrote and spoke extensively on topics ranging from equal pay for women and the career of Australian rapper Kid Laroi to personality development and, of course, crypto (“It is difficult to predict the exact time window of when Bitcoin’s value will reach zero….But it will happen sooner or later because it is a fragile asset which retains no real value”).

Lichtenstein had a relatively muted online persona, although he did sporadically emerge on Twitter to protest “Big Tech censorship” or criticise an article on cryptocurrencies for including “almost nothing about how to secure your keys”.

In the month of the Bitfinex hack, Morgan shared a photo of the two of them sitting on a couch with the caption, “I always love getting into trouble w/ this crazy guy…Thanks for always inspiring me to be a better entrepreneur!”


The Way I Scam

There’s no knowing if the “trouble” Morgan was alluding to involved the hack in Hong Kong. But what is known is that since 2016, her social media feed became more and more extravagant, with photos of jet-setting escapades to Malaysia and Mexico and Panama. 

According to an NYT report, prosecutors claim the couple hid the stolen crypto stash in numerous ways, including “opening accounts under false names; moving stolen funds in small sums in thousands of transactions to avoid detection; using computers to automate their transactions; spreading funds across virtual-currency exchanges; and using US business accounts to obscure their illegal activity”.

The couple are currently out on bail, with the next hearing scheduled for Friday. If found guilty, they could each serve up to 25 years in prison. Which would invariably be a Holmes-esque fall from grace for two individuals who, for many, were seen as quintessential personifications of our times.

During a lecture in 2019, Morgan is reported to have said: “I do believe that the ends justify the means sometimes…My end goals aren’t bad or evil. I’m not trying to scam someone out of money or get someone hurt in any way.”

The talk was on the topic “How to Social Engineer Your Way Into Anything”. Incidentally, the slide with this title had an image of two cuffed hands behind bars.


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