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Ilya 'Dutch' Lichtenstein, 34, and his wife, Heather Rhiannon Morgan, 31, who raps under the name Razzlekhan, were arrested on Tuesday in Manhattan on federal charges of conspiracy to commit money laundering and conspiracy to defraud the United States. 

At an initial court appearance, a magistrate judge ruled Lichtenstein could be released into home detention on a $5 million bond co-signed by his parents; the bond amount for Morgan was set at $3 million but they were to remain in custody until the bail conditions were met.

Prosecutors had argued defendants, who live on Wall Street in lower Manhattan, should be denied bail, calling them flight risks who still potentially have access to vast sums of money.  

Federal law enforcement officials said they recovered roughly $3.6 billon in cryptocurrency - the Justice Department's largest ever financial seizure - linked to the hack of Bitfinex, a virtual currency exchange whose systems were breached nearly six years ago.    

Lichtenstein is a citizen of both Russia and the United States and the co-founder of an online marketing firm. Morgan, a rapper and former Forbes contributor, describes herself as 'an expert in persuasion, social engineering, and darkmarket url game theory'.

WARNING: EXPLICIT LYRICS 

Bail for Ilya 'Dutch' Lichtenstein, 34, and his wife, Heather Rhiannon Morgan, 31, was set at $5million and $3million respectively after their arrest on Tuesday for allegedly laundering $4.5billion in Bitcoin stolen in the 2016 Bitfinex exchange hack

Morgan, who raps under the name Razzlekhan, (seen in front of Federal Hall on Wall Street in a music video) declared herself the 'Crocodile of Wall Street' in one of her rap songs

In this courtroom sketch, attorney Sam Enzer, center, sits between Heather Morgan, left, and her husband, Ilya 'Dutch' Lichtenstein, in federal court on Tuesday

'I'm many things, a rapper, an economist, a journalist, a writer, a CEO, and a dirty, dirty, dirty dirty h*,' she raps in her 2019 single, Versace Bedouin.

'When she's not reverse-engineering black markets to think of better ways to combat fraud and cybercrime, she enjoys rapping and designing streetwear fashion,' her  reads. 

The August 2016 Bitfinex hack itself was one of the largest crypto heists ever recorded - so massive that news of the theft knocked 20 percent off Bitcoin's value at the time. 

Lichtenstein and Morgan are thus far not charged directly with perpetrating the hack, but rather with receiving and laundering the stolen funds. The case was filed in a federal court in Washington, D.C.

It was unclear who will be representing the couple in the criminal case and whether they had an attorney to speak on their behalf.

They were due to appear in federal court in Manhattan at 3 p.m. on Tuesday. 

The couple is accused of conspiring to launder 119,754 bitcoin that was stolen, after a hacker attacked Bitfinex and initiated more than 2,000 unauthorized transactions.

Morgan, a rapper and former Forbes contributor, describes herself as 'an expert in persuasion, social engineering, and game theory'

The couple is accused of conspiring to launder 119,754 bitcoin that was stolen, after a hacker attacked Bitfinex and initiated more than 2,000 unauthorized transactions

Justice Department officials said the transactions at the time were valued at $71 million in Bitcoin, but with the rise in the currency's value, it is now valued at over $4.5 billion.

'As the complaint alleges, the FBI and federal prosecutors were able to trace the movement of Bitcoin from this hack,' said Matthew Graves, alphabay link the U.S. Attorney for the District of Columbia.

He added that the money moved through a major darknet market exchange tied to a host of crimes, as well as cryptocurrency addresses tied to child sexual abuse materials.

Lichtenstein and dark web darknet market list Morgan are facing charges of conspiring to commit money laundering, as well as to defraud the United States.

Prosecutors said on Tuesday the illegal proceeds were spent on a variety of things, from gold and non-fungible tokens to 'absolutely mundane things such as purchasing a Walmart gift card for $500.'

Bitfinex said in a statement that it was to working with the Department of Justice to 'establish our rights to a return of the stolen bitcoin.'

'We have been cooperating extensively with the DOJ since its investigation began and will continue to do so,' the company said. 

Bitfinex said it intends to provide further updates on its efforts to obtain a return of the stolen bitcoin as and when those updates are available. 

Tuesday's criminal complaint came more than four months after Monaco announced the department was launching a new National Cryptocurrency Enforcement Team, which is comprised of a mix of anti-money laundering and cybersecurity experts.

The August 2016 Bitfinex hack itself was one of the largest crypto heists ever recorded - so massive that news of the theft knocked 20 percent off Bitcoin's value

Lichtenstein and Morgan are facing charges of conspiring to commit money laundering, as well as to defraud the United States

Morgan is seen rapping with the New York Stock Exchange behind her to the right

Cyber criminals who attack companies, municipalities and individuals with ransomware often demand payment in the form of cryptocurrency.

In one high-profile example last year, hackers caused a widespread gas shortage on the U.S. East Coast when by using encryption software called DarkSide to launch a cyber attack on the Colonial Pipeline.

The Justice Department later recovered some $2.3 million in cryptocurrency ransom that Colonial paid to the hackers.

Cases like these demonstrate that the Justice Department 'can follow money across the blockchain, just as we have always followed it within the traditional financial system,' said Kenneth Polite, assistant attorney general of the department's Criminal Division. 

Justice Department officials say that though the proliferation of cryptocurrency and virtual currency exchanges represent innovation, the trend has also been accompanied by money laundering, darknet market markets ransomware and other crimes

'Today´s arrests, and the Department´s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals,' Deputy Attorney General Lisa Monaco said in a statement. 

'In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions. Thanks to the meticulous work of law enforcement, the department once again showed how it can and will follow the money, no matter the form it takes.'  

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