The Ballad of Heather Morgan and Ilya Lichtenstein, Bitcoin’s Bonnie and Clyde
The time was around 03:00 the first time they came. An unmarked, indeterminate government-issued vehicle pulled up to the towering brown brick and blue glass building in midtown Manhattan known only by its address: 75 Wall Street. The city that never sleeps was in that rare moment when the ostinato of car horns and rattling subway cars had been replaced by a deep, if brief, slumber. The agents exited the vehicle and walked through the revolving doors of the 42-story building, crossing the gleaming white oak floors of the lobby to reach the doorman on duty that night. It was 2021, in the midst of the second wave of the COVID pandemic, and the bottom 18 floors of “75”, which had originally opened as the Andaz Hotel, had closed due to the virus. Seeing anyone at this time was rare for the doorman, but seeing a group of federal agents was a complete anomaly.
“We’re picking up signals that someone in this building is dealing in child pornography,” one of the agents told the doorman. “We need to get on the roof to see if we can trace where the signal is coming from.” The doorman, although a little surprised, obliged and showed the way to the elevators.
As the agents entered one of the building’s four elevators, the doorman wondered which resident of the 346-unit building, where apartments can cost as much as $7 million, might be dealing in child pornography. After a while, the agents returned to the lobby and left the building.
A couple of weeks passed and the authorities returned. And again a few weeks after that. At one point the night doorman gave them a little investigative advice. “Are you sure you’re in the right building?” he said. “Looks more like something you’d find at 95 Wall Street?” In fact, 95 was far more malicious than 75. During that same summer of 2021, the gleaming glass building across the street had been the site of a series of drug busts by the NYPD; online reviews of the building had called it a haven for coke dealers, gangsters and all-night Airbnb parties. Most recently, an exclusive escort had been killed there, stuffed into a 55-gallon drum and rolled out the back door before being dumped in New Jersey.
“No,” said the agents. “Definitely this building.” And off they went to the roof again. Then, one evening, the pattern changed. The agents showed interest in one particular floor. The signal they were looking for seemed to be getting stronger.
In reality, the agents were not at 75 because of child pornography. The crime they tracked there had originally taken place in Hong Kong in the summer of 2016, when someone had found a flaw in the code of the Bitfinex crypto exchange and stolen 119,754 Bitcoins, worth around $72 million at the time. The value had since grown 70 times and was now in the billions range. After half a decade of tracking and tracing, climbing rooftops, and skulking through the dead of night, the FBI had finally—finally! – found the people who somehow got hold of the stolen Bitcoin. A married couple in their early 30s, with a wild online presence and a Bengal cat named Clarissa (who had her own Instagram account). Her husband, Ilya “Dutch” Lichtenstein, a Russian-born émigré, was an investor and part-time mentalist magician. His wife, Heather “Razzlekhan” Morgan, who was from the United States, was an entrepreneur, journalist and rapper.
That was just the beginning, as I discovered in more than 50 interviews with friends and former colleagues of the couple, investigators close to the case, and employees and residents of 75 Wall Street. As the feds were about to find out, this would turn out to be one of the strangest cases in the ever-evolving world of crypto-crime – and the first clue to just how bizarre this case would get was on the couple’s social media. accounts.
“BLINDERS, BLINDERS, BITCHEZ!”
Ah, Bitcoin, a new era of money. That invention-slash-ideology that promised to usher in an era of glittery, sparkly, frolicking financial technotopia. Our generation’s fiscal Woodstock! And by god, did the internet need it. Back in the day, when this bizarre Bitcoin thing was slowly pushed out of the birth canals of the web’s most arcane forums, financial anonymity didn’t exist online. You bought something digitally, and a database somewhere got tattooed with every microscopic detail about you.
Bitcoin, which made its quiet debut in 2009, promised to change that. It went on to upgrade the global financial landscape in ways no one could have ever thought possible (anyone who tells you they predicted the world we live in today is either a liar or a Bitcoin billionaire). Crypto now accounts for $3 trillion in assets, and the world’s largest financial institutions, including Chase and the Bank of England, are citing digital currencies as the future of finance, although a major collapse in value this year has even some true believers wondering if this prediction will pan out .
The rise of cryptocurrencies also brought with it a new era of crime unlike anything we’ve ever seen before. Sites soon appeared on the dark web that made it easy to buy drugs, guns, murder, fake diplomas, ricin, body parts, bombs, rocket launchers and even uranium, all using Bitcoin. And a few years later, due to the promise of financial anonymity, came the emergence of a relatively obscure crime called the ransomware attack, where a company’s or a person’s computer system is taken hostage and the only way to unlock it is by paying a fee in – you guessed it – crypto. While this type of hacking dates back to the early 90s, payments were often made by cash or credit card and as such were few and far between. Last year, the FBI released a report saying that there are now 4,000 ransomware attacks every day (compared to seven bank robberies a day), and that online criminals stole $14 billion in Bitcoin in 2021 alone (traditional bank robbers, by comparison, only away by a couple of hundred million). Because of the ease of crypto, hospitals are now being held hostage and held at financial gunpoint. Banks and hedge funds stop. Even a meatpacking plant was recently forced to pay $11 million in Bitcoin to access its beef patties, chicken cutlets and pork sausages.
Then there are other crimes, where new waves of hackers phish, spoof, rootkit, worm, cloak and brute-force themselves to steal all manner of digital assets, from NFTs to literally (and sometimes figuratively) making off with millions in digital gold.