A federal judge yesterday ordered the release of Heather Morgan, one half of the couple accused of laundering billions of dollars worth of Bitcoin after the 2016 Bitfinex hack.
Morgan’s husband, Ilya Lichtenstein, was to remain in custody pending trial. The ruling was made by Beryl Howell, chief judge of the US District Court for the District of Columbia.
Howell’s decision follows calls from Morgan and Lichtenstein’s lawyers to allow both parties bail.
Competing arguments for and against bail can be found here.
Accused Bitfinex launderers and the case for bail
According to the couple’s lawyers, Morgan and Lichtenstein ought to have been awarded bail for four main reasons.
The first of these, the couple’s lawyers alleged, is that neither party represents a flight risk, a concern “belied by the fact that Ms. Morgan and Mr. Lichtenstein both stayed put in their residence in lower Manhattan in New York even after learning of the Government’s investigation targeting them in this case.”
The couple’s lawyers also argue that the detention of the couple would “unfairly prejudice” their ability to defend themselves against the charges brought against them.
Third, Morgan is recovering from breast surgery that took place on January 31, 2022. Her lawyers argue that the medical issues involved would “undercut any risk that she would flee,” and, in turn, that her incarceration presents a “grave risk to her well-being.”
Lastly, the couple’s legal representation said neither individual have reason to flee, as “the government’s complaint reveals significant holes in the government’s case against them.”
The case against bail
Prosecutors, in turn, listed several arguments against both parties’ case for bail.
In direct response to the argument that both Morgan and Lichtenstein remained in New York after learning of the case against them, prosecutors argued that neither individual likely realized how much evidence the government had against them.
Prosecutors also said the defendants’ access to “hundreds of millions of dollars in cryptocurrency weigh heavily in favor of detention.”
This includes funds that are apart from the government’s recent seizure of over 94,000 Bitcoin, worth little more than $4 billion today.
“With hundreds of millions of dollars in cryptocurrency assets at their disposal, accessible from anywhere in the world with an internet connection, the defendants could easily finance a flight from prosecution,” prosecutors added.
The prosecution also added that the proposed conditions of bail—home detention with local monitoring and bonds of $5 million for Lichtenstein and $3 million for Morgan—would not ensure the defendants’ return to court.
“The value of any bond—though significant by any normal measure—is dwarfed by the value of the funds available to the defendants if they chose to flee,” prosecutors said.
Judge Howell ultimately decided that Lichtenstein would not be granted bail on the grounds that he remained in control of the funds surrounding the case.
Morgan on the other hand, was found to be less likely to have access to the funds allegedly tied to Bitfinex, and thus she represents less of a flight risk than her husband.
https://decrypt.co/92967/accused-bitfinex-bitcoin-launderer-heather-razzlekhan-morgan-released-bail
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