Accused bitcoin launderers Heather Morgan and Ilya Lichtenstein in plea talks

Federal prosecutors on Monday said they were in plea negotiations with a New York couple recently arrested on charges of trying to launder $4.5 billion worth of stolen bitcoin cryptocurrency.

The talks were cited in a request by prosecutors asking a judge to postpone by 40 days Friday’s scheduled status hearing for the couple, Ilya “Dutch” Lichtenstein and Heather “Razzlekhan” Morgan, in U.S. District Court in Washington, D.C.

Prosecutors said in a court filing that the postponement would “facilitate … plea discussions between the parties,” as well as give them time to assemble and share evidence that could be used against the couple with their attorneys.

Morgan, 31, was arrested with the 34-year-old Lichtenstein, on Feb. 8 in their Manhattan apartment. The arrests were on the same day the Justice Department has said it seized more than $3.6 billion worth of bitcoin that was part of the alleged laundering scheme.

Prosecutors allege that the couple illegally tried to hide, through a complex series of transactions, the source of almost 120,000 bitcoin stolen during the 2016 hack of the Bitfinex cryptocurrency exchange. Neither of the defendants is charged with the hack itself.

At the time of the hack, the stolen bitcoin was worth $70 million. But the value of bitcoin has soared since then.

Lawyers for the couple do not oppose the postponement of their hearing until May 4, according to Monday’s filing by the U.S. Attorney’s Office for the District of Columbia.

Prosecutors disclosed in court on Feb. 28 that they were discussing a possible “resolution” of Morgan’s criminal case to avoid a trial.

But until Monday, they had not publicly used the words “plea discussions” to describe those talks with her lawyers or attorneys for her husband.

Attorneys for the couple did not immediately respond to a request for comment on the filing.

It is common for prosecutors and defense attorneys to discuss possible plea deals in criminal cases and for those discussions to lead to postponements of court hearings.

But the couple’s case is unusual for the relatively short time between their arrest and the disclosure of plea talks.

Morgan, an aspiring rapper and entrepreneur, is free on a $3 million bond.

Lichtenstein has been in jail since his arrest and has been denied bail.

Netflix last month announced that a series on the couple will be directed by Chris Smith, who was executive producer of the company’s Covid pandemic smash hit “Tiger King.”