Inside Heather Morgan and Ilya Lichtenstein's Confounding Bitcoin Case - The New York Times

“The couple would never flee from the country at the risk of losing access to their ability to have children,” the lawyer wrote.

At the hearing, a prosecutor, Margaret Lynaugh, said in opposing bail for Mr. Lichtenstein, a dual citizen of the U.S. and Russia, that he had an active Russian passport and the means and intent to flee.

The judge ordered that the couple be freed on multi-million-dollar bonds, but at the government’s request, a federal judge in Washington blocked their release and scheduled the hearing on Monday.

In court papers, the government has called Mr. Lichtenstein and Ms. Morgan “highly sophisticated criminals.” Prosecutors said they believed the couple had significant additional assets, including hundreds of millions of dollars in virtual currency stolen from the Bitfinex exchange that had not been recovered, as well as access to numerous fraudulent identities bought on the so-called darknet, a hidden portion of the internet used for illicit transactions.

The government says the couple had also established financial accounts in Russia and Ukraine, and appeared to have been setting up a contingency plan for a life in one of those countries before the pandemic.

As evidence of what they depicted as a complicated money-laundering scheme, prosecutors say in a court filing that they had traced stolen cryptocurrency to more than a dozen accounts held in the true names of the couple or their businesses.

The government says in the court filing that when agents executed a search warrant at the couple’s Lower Manhattan apartment on Jan. 5, they recovered more than 50 electronic devices, including a bag labeled “burner phone,” and more than $40,000 in cash. Many of the devices were partially or fully encrypted or otherwise password protected, the court filing says.

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