Man Who Laundered Billions in Bitcoins Says Bitcoin Fog Was a Help: Bloomberg

Ilya Lichtenstein has gone from high-profile defendant to government witness, testifying against a mixing service that he used to hide laundered assets from the Bitfinex hack.

He told a jury that Bitcoin Fog – a darknet favorite – wasn’t as good as some of the other mixers he used.

Ilya Lichtenstein, one of the crypto industry’s most high-stakes criminals, is now helping federal prosecutors in their case against Bitcoin Fog, one of the mixing services he said he’d used to conceal assets.

Lichtenstein – known for the multi-billion Bitfinex hack of bitcoins worth $3.6 billion when he pleaded guilty to money laundering last year – appeared this week in a Washington, D.C., trial of the accused operator of the mixing service associated with darkweb criminality, according to a report from Bloomberg News.

Lichtenstein, who had been charged and pleaded guilty alongside his wife, Heather “Razzlekhan” Morgan, told the jury that he used various mixers including Bitcoin Fog to “obfuscate” the funds from the Bitfinex hack, but it wasn’t his major method of laundering, according to Bloomberg. He said he moved on from that particular mixer once he discovered other services “suited his purposes better.”

The U.S. Department of Justice’s seizure of the billions in crypto in the Bitfinex case was unprecedented.

In the Bitcoin Fog case, U.S. authorities had arrested and charged Roman Sterlingov, a dual Russian-Swedish national, with money laundering in his operation of the mixing service in 2021. He’s now on trial in that case.

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