The spectacular case against a hipster New York couple who were allegedly caught with $3.6 billion in stolen bitcoin has taken a more mysterious turn.
A court filing made by U.S. prosecutors on Wednesday in the case against Ilya Lichtenstein and his eccentric rapper wife Heather Morgan revealed that the investigation now involves “classified national security information and documents.”
The filing sheds little light on what the top secret information entails, but prosecutors earlier had argued that the couple were serious flight risks due to Lichtenstein holding Russian citizenship and that the pair had traveled extensively in Ukraine prior to their arrest earlier this year.
While there, the couple had collected documents and opened bank accounts with the apparent intention of relocating to the country under false identities, prosecutors said. The trip had occurred prior to Russia’s invasion of Ukraine.
The filing sought approval from the judge to set certain protocols for allowing defense attorneys for the couple to view classified materials.
A spokesperson for the Department of Justice and an attorney for Lichtenstein declined to comment. An attorney for Morgan didn’t immediately respond to messages seeking comment.
A federal judge ultimately agreed to hold Lichtenstein, 34, without bail and he remains in custody. Morgan, 32, has been under home confinement in New York since February when she was released on a $3 million bond. Both have pleaded not guilty.
The couple were arrested that month after investigators traced the billions in bitcoin
stolen from the Bitfinex currency exchange in a 2016 hack. They have been charged with conspiracy to commit money laundering and to defraud the U.S. government, but not with committing the actual theft themselves.
When hackers made off with approximately 120,000 bitcoin from the Bitfinex currency exchange in 2016, it was worth around $71 million. When the lucre was initially seized it had swelled in value to around $4.5 billion. It would be worth under $2 billion today.
Prosecutors argued at the time that even though investigators had seized $3.6 billion in stolen bitcoin from crypto wallets the couple controlled, it was believed the couple still had access to accounts containing hundreds of millions of dollars in unaccounted money.
That presented serious problems for the couple, who allegedly struggled for years to launder the ever-increasing pile of money, prosecutors said.
The case drew widespread attention due to the curious personalities of the defendants, both of whom worked in the tech startup and cryptocurrency world.
Morgan, a serial entrepreneur originally from California, also maintained an alter ego as an “irreverent comedic rapper,” known as Razzlekhan, behind a series of off-kilter songs and videos. Lichtenstein also went by the nickname “Dutch.”