- The New York couple accused of a scheme to launder $4.5 billion in bitcoin will be split up after a judge granted bail to wife Heather Morgan but not husband Ilya Lichtenstein.
- The ruling came Monday as the couple appeared in a Washington, D.C. court for the first time since their arrest on February 8.
- The judge compared the private keys to crypto wallets discovered in Lichtenstein's cloud storage to " the smoking gun."
WASHINGTON, D.C.—A federal judge ruled that a 34-year-old US-Russian dual citizen accused of trying to launder $4.5 billion in stolen bitcoin must await trial behind bars, but ordered his co-defendant and wife, Heather Morgan, released to home incarceration.
Morgan, 31, and her husband Ilya Lichtenstein, were arrested on February 8 at their apartment in New York City on charges related to the 2016 hack of the cryptocurrency exchange Bitfinex.
Judge Beryl Howell said on Monday that private bitcoin keys discovered in an online account connected to Lichtenstein were the "electronic version of the smoking gun."
Despite prosecutors' arguments that the couple presented a significant flight risk because of their ties to Russia and Ukraine however, the judge ruled ruled that Morgan could remain in her home with location monitoring until the trial.
The couple's Silicon Valley pedigree and Morgan's side hustle as the rapper Razzlekhan has captivated the public's attention and shocked acquaintances, many of whom told Insider they could not imagine the quirky but otherwise unremarkable duo to be capable of pulling off the elaborate crime that prosecutors allege.
The decision Monday reverses an earlier ruling by a magistrate judge in New York to let Morgan out on a $3 million bond, and to let Lichtenstein out on a $5 million bond. They were each required to get five co-signers on their bond and post their parents homes as security, in addition to being tracked electronically and forfeiting the use of smart phones.
That decision was put on hold just hours later when prosecutors were granted an emergency stay to keep the couple in custody.