[0:00]On the 3rd of August 2016, thousands of users from a cryptocurrency exchange called BitX, logged on to their accounts to find that their money, all of it had been stolen. Breaking over night nearly 100,000 Bitcoin has been stolen from exchange platform BitX. BitX had been the victim of a highly sophisticated cyber heist. In a matter of hours, nearly 120,000 Bitcoin had vanished from the exchange. That much was around $72 million. then, today, it would have been over $12 billion. When high profile attacks like this happened, law enforcement usually assumes they're the work of drug cartel, North Korea hackers or terrorist groups. Cryptocurrency is the perfect way for criminals like this to move money in the shadows. But in the case of the Bitfinex hack, that couldn't have been further from the truth.
[1:01]I'm real far but don't know where I'm heading. Motherfucking crocodile Wall Street. I'm a motherfucking bad. Behind this attack was the most unlikely pair of people. Elia Lichtenstein, a Russian American startup founder and Heather Morgan, an economist, turned internet rapper. Today, they're known as the Bitcoin Bonnie and Clyde and this is the story of how their bizarre romance turned into a national security threat. The world's rap career and the largest crypto heist in history. Two individuals in Manhattan this morning and the seizure of a massive $3.6 billion worth of cryptocurrency. This is the largest seizure of cryptocurrency ever by US law enforcement. I hacked Bitfinex.
[2:08]The perfect heist is only possible with the perfect target. And as a hacker in the early days of crypto, you couldn't ask for a better one than BitX. And honestly, looking at how sophisticated these hacks are getting, it's easy to appreciate tools that help you stay 10 steps ahead, not just in crypto, but in everything digital. That's where chat LLM teams from Acomas AI come in a power house of the world's smartest AI models like GPT 4.1, Deep Seek, Gemini 2.5 Pro, Grock, Cloud Sonic 3.7 and more all in one place. With root Linux, you don't even have to think about which model to use. You just type your prompt and it figures out the best one for you. Automatically, smooth. But this isn't just about chat. You can generate images and videos. It supports top tools like chat GPT, image gen mode, Dolly, Image, runway, climbing 2.0 and many more. So your visual content is just a simple prompt away.
[3:06]They've recently introduced deep agent, the God tier AI agent that literally does everything. Want to build a site, app, presentations, research reports or even games. It's called vibe coding. Basically, you describe what you want and it does it for you. Do you work a lot with files, upload a PDF and instantly summarize, analyze or ask questions about specific sections, no more scrolling through hundreds of pages. And One of my favorite bits, humanize feature. You know how AI responses can sound dead inside? This fixes that. Makes everything sound like a real person wrote it. All of this, 10 bucks a month. That's it. Way more affordable than pricing it together tool by tool. Click the link in the description and sign up to chatlml.ac.ai. Now, back to Bitx. When it launched in 2012, Bitx offered a convenient way for people to buy, sell and store cryptocurrency. In that sense, it was just like any other exchange. But unlike many of its competitors, it was built from the ground up for crypto's most active traders. Bitfinex had advanced features like peer-to-peer margin trading and lending, so before long, it had attracted a substantial number of so-called whales, whose transactions could sometimes total millions of dollars. However, Bitfinex wasn't exactly the safest platform. And in May of 2015, it was hacked 1,500 bitcoins worth around $350,000 at the time were stolen. Now, this wasn't enough to bring the company down, but it was a wake up call. To level up their security, BitX partner with Bitco, a company that specializes in storing cryptocurrencies safely and together they designed a new system. In the previous hack, the attackers had gained access to some of BitX's private keys, which are like the passwords to a crypto wallet. Once you have them, You can transfer all its funds. But now, instead of a single private key, every wallet on BitX would have three. One from BitX, one from BitGo, and another one as a backup. And in order to withdraw any funds, you would need at least two of them. The idea was simple. If someone managed to breach either BitX or BitGo, it still need the other key to move any funds. This is called a multi-signature wallet system, and on paper, it had no single point failure, so Bitx was convinced their customers would be safer than ever. But unfortunately, they were wrong. This system had a gaping security hole and it didn't take long for someone to find it. On August 3rd, 2016, the top 2000 wallets on Bitx suddenly started transferring their funds to an outside wallet. None of the users had to prove the transactions, but in just three hours, their balances were reduced to zero. and a collective total of 119,754 bitcoins had disappeared. Somehow someone had hacked the system. The only question was, who?
[6:19]Growing up, I did not have a lot of friends and it was really hard because no one really believed in me, understood me, supported me. the kids she grew up with, but she was excellent smart. Because of her father's job, traveled all around the world and she became fluent in Japanese, Korean, Chinese, Arabic, Russian and Turkish.
[6:55]David and found an entry level job at the World Bank in Cairo. And even though she wasn't technically working as an economist there, hired signed off her emails as Hector Morgan, economist, entrepreneur and hustler. You see, Hector was desperately ambitious. She was determined to become rich, famous and powerful. Make your dreams a reality. So, in 2013, she moved to Silicon Valley where anyone could become an overnight millionaire. smart people in Silicon Valley when I live there and all of them were entrepreneurs in the tech space. And even though she didn't know anyone there, it didn't take long before she started making waves. One of her's unique talents was social engineering, which is just a nicer way to say manipulation. Basically, she was really good at meeting important people, catching their attention and using them to get something she wanted. When got to the valley, she met the founder of a gaming company from the Middle East who gave her a job. But instead of a salary, Heather worked out a deal where she got paid in introductions to important people in the tech industry. Unconventional, but it paid off. Eventually, Heather charmed her way into a startup accelerator called 500 startups. Every year, they would pick 500 new companies, mentor their founders and hope someday one of them became worth millions. This is where Heather met her partner in crime. Ah, fuck! I was like the kids he grew up with either.
[8:38]He was a Jewish immigrant from Russia and small so an easy target for bullies. He didn't even bother trying to fit in. Instead, he became obsessed with computers. I school was part of an experimental education program that let students access the state of the art technology while other kids were playing outside, he was learning everything he could about programming. During College, Isabelle started a few small businesses like a dating site and an e-commerce store selling brain supplements. He was making more money than any of his classmates. But his real breakthrough was mix rank. A company that scraped the internet for ads tracked which ones had the best performance and sold those insights to marketers. Investors loved it. Even Mark Cuban put money in it. Mix rank was an instant hit and its success got Isabelle invited to be one of the mentors at 500 start. And so, in the summer of 2013, was giving a talk about marketing and it just so happened that was in the audience. So my first. When approached him looking the network, pursued her relentlessly. First, was an interested. He was not the kind of high status flashy guy she usually went for, but was persistent and eventually, she let him in. Their relationship to say the least was unusual. Nobody was sure or if they were rooms or romantic partners because they seemed like polar opposites. Heather had an almost manic energy and Elia on the other hand was reserved. Over 100 customers. But underneath the surface, they had a lot in common. They had both spent their lives feeling like outsiders and they were both smart, strategic and deeply, obsessively ambitious. At first, they channeled energy into their businesses. In 2014, Heather launched sale a marketing startup that sold cold email campaigns. Hi, I'm Heather Morgan, the CEO and founder of sales folk and in the last 10 years I've written more than 10,000 cold emails. Not the most grounding business idea, but Heather knew how to make herself sound like an expert. She claimed to have discovered a secret formula that could drastically increase email response rates and that was enough. Meanwhile, Elias Company, Mix rank was growing like never before. The product worked, customers were signing up and the company was getting ready for a massive expansion but suddenly everything stopped. At the end of 2016, I just stopped showing up at mix rank. One day out of nowhere, hired fired all her employees at sales focus too. Something had changed. In public, hired and I were seen as these hard working entrepreneurs. Strange as they were, everyone thought they were just another Silicon Valley couple. Nobody would have thought that they had just pulled off one of the biggest digital heist in history. They were now 119,754 Bitcoins richer, but how?
[2:49]In 2015, Bitcoins upgraded their security systems to prevent ever getting hacked again, but they had overlooked a critical flaw. Inside the system, every user's wallet had two main private keys, held by Bitgo and Bitfenx respectively, as well as a backup also held by Bitfenx. To start a transaction, you would need at least two of them, which in theory meant the system had no single point of failure. But this was only true if the keys were held in different places. And the thing is, they weren't. Bitfenx was holding their main keys and their backup keys in the same server. So if anyone got in, They could steal everything. It's still unclear if Heather and Eliane knew this or if they just got lucky. But still, if they wanted to access those keys, they had to do two things. First, they had to hack into Bitfinx's back end systems. And second, they had to get permission to access the keys. Now, how they hacked Bitfinx is mostly unknown. When Eliane, who did the hacking broke in, he used a number of sophisticated data destruction tools. leaving no trace of himself or any clues as to how he got in. Bix could only see what he did inside. To get the private keys, Ilia needed the server they were in to willingly give them to him. For that, he needed a special password which only certain people inside Bix had. And somehow, Ilia knew the password that belonged to Johnalo Devasini, Bix's chief financial officer. Now, this guy is complicated. Devasini started his career as a plastic surgeon and then graduated to selling counterfeit copies of Microsoft software for which he was find. He joined BitFex as CFO the year it was founded and these days he is also the CFO and major shareholder of Tether. It's crypto's largest stable coin by market cap and also potentially the largest Ponzys scheme in history. But that is a story for another day.
[4:59]When it comes to the Bitfenx hack, Devasini has gone a lot of criticism and some people even believe he was involved, although there's no credible evidence of this. Whether that's true or not, I had his password and that let him force the server to give them the private keys thinking he was Devasini. With that, on August 3rd, 2016, I released a program that automatically targeted the most valuable wallets on Bitfenx and use their keys to transfer all of the Bitcoin they held to a wallet of his own. Over the course of 3 hours, more than 2,000 were and now held nearly 120,000 bitcoins worth around $72 million that day. This was one of the largest crypto heist in history. And when the news broke, the effects were devastating. The price of Bitcoin dropped by over 20% and Bitcoin froze all trading on the platform. They had just lost 36% of all the assets stored on their platform and their top 2000 wealthiest users wanted it back. A few days later, they announced their plan. The losses would be generalized across all accounts, meaning instead of letting only the wealthiest users take the hit, the ones who had been targeted, they spread the damage to everyone. It didn't matter if you held $10 or $10 million. Every user's balance was slashed by $36%. To compensate though, BitFex gave their users a new token called BFX for every dollar they had lost and they promised to buy these tokens back at $1 each as soon as they could. This was an extremely controversial plan. At the time, one Bitcoin was worth around $600. BitFex took around 8 months to fully reimburse everyone, but they were really able to do it because by then, BitFex price had nearly doubled. If users had been reimburs Bitcoin instead of BFX tokens, they would have been the ones to benefit from that. But instead, it was Bitcoin. Meanwhile, Heather and Ilia were facing a dilemma. Stealing the Bitcoin had actually been the easy part. Now, they had an even bigger problem. How do you lender $72 million when everyone in the world knows exactly where it is.
[7:29]Bitcoin for all its hype is surprisingly useless outside the digital world. You can't walk into a car dealership and buy a Lamborghini with your stolen Bitcoin, you can't buy a house without raising red. You can't even buy groceries. If and Elia wanted to turn their Bitcoin into cash they could spend in the real world, they had to go through a centralized exchange like Binance, Coinbase or Bitfinex. But that came with a major risk. Exchanges require identity verification. , ID, social security numbers, and if their stolen Bitcoin was ever connected to them, the game was over. For now though, and Elia were safe. You see, Bitcoin is paradoxical. When you send money between two wallets, there is no name, ID or location attached to either of them. Just a long string of numbers and letters. So, in a way, Bitcoin is anonymous, but it's also the most transparent financial system in history. Every transaction is recorded on the blockchain, a public ledger that anyone can inspect. The authorities were already watching Eli's wallet. Vitx had made it public right after the hack to effectively blacklist it. This meant that even though no one knew who controlled the stolen Bitcoin, they knew exactly where it was. And if it moved, they could just follow it. For Hester and Eli, this posed an interesting challenge. They had stolen nearly 120 000 Bitcoins worth over $100 million now, but before they could spend any of it, somehow they had to lard it on the blockchain and leave no trace behind. Here's how they did it. First, and I begin dividing the stolen Bitcoin by sending it to other wallets. This would make tracking it slightly more time consuming, but to really cover their tracks in 2017, and I turned to Alphabet, a dark web marketplace known as has eBay for criminals. AlphaBay was a hub for everything illegal. Drug trafficking, weapon sales, malpractice, stolen identities, and of course, money laundering services. At the time, the most sophisticated way to launder cryptocurrency was mixing. A complicated process where the stolen bitcoin was thrown into a pool with other users's coins. For a small fee, the users' money would be bounced across thousands of different wallets, traded into other cryptocurrencies split up and reassemble into new wallets and returned to the users. Only alphabet knew how the inner workings of the mixing algorithm worked. So by the time the stolen Bitcoin entered the blockchain again, the authorities had lost track of it. The trail went cold at Alphabet and the money was successfully laundered. Now, Heather and Alia were free to use a centralized exchange without raising any eyebrows. And meanwhile, the value of their Bitcoin had skyrocked to almost $300 million. But unfortunately for them, the fun was over. By 2017, Alpha Bay had become the largest dark web marketplace in the world, attracting attention from global law enforcement. That July, an international task force led by the FBI, DEA, Europol, anti- authorities launched Operation Bayonet, where they arrested Alpha Bayon in Thailand and took down the service.
[11:00]Today the Department of Justice announces the take down of the dark web market Alpha Bay. This is the largest dark market web place take down in world history. This left Heather and Elia without a way to unfold their Bitcoin, but there was a much much bigger problem. When the authorities arrested Alpha Bay founder, they seized his laptops, his servers, his records, everything and buried in side was a digital trail leading right back to the BitX hack. At first, it was just a complex web of numbers and bibliographical addresses, but the deeper they looked, the more patterns they found. Investigators already knew the wallets where the stolen Bitcoin had come into alphabet, and now they could reverse engineer their mixing algorithm to see where it had come out. From there, it was easy to follow the money to accounts on a centralized exchange, and although they were using fake names and ID's, everything pointed to Elia Lichen and Heather Morgan. Law enforcement now knew exactly who they were, but when they looked for them on social media, they couldn't believe what they saw. started appearing across social media with an alter ego. That alter ego was named Rosa Han and she was a rapper.
[12:25]It's almost like you're watching a movie unfold. I like trash. I like cash. I like My potatoes mash. Don't forget kids, your best self is always your real self. Stay authentic.
[12:44]In the weeks after the Bitx hack, Heather and I weren't in hiding, they were on vacation.
[12:53]Oh fuck. Okay, so Dutch, can you tell me a little bit what you thought I mean a pet is completely different. While the authorities scrambled to trace their stolen Bitcoin, they flew off to Panama, seemingly celebrating without a care in the world, but then they flew to Ukraine where things got a little more serious. During a stop at a post office, Heather and Liam moved like trained operatives. They knew exactly where the security cameras were, turning their heads at just the right moments to avoid being caught on tape. They were there to pick up a parcel with fake passports, gold bars and staaks of cash, essentials for a quick escape if things ever got too hot. Clearly, this wasn't amateur work. It was something out of a spy thriller. At this point, anyone would have assumed that Heather and Elia were trying to disappear. Most high profile cyber criminals just want to vanish off the face of the earth as soon as they get their money, but not them. Instead of disappearing, Heather and Alia moved to New York, and not just anywhere, they moved to a luxury high rise in the financial district. Where they started living a very public, very strange life. By day, was still running her email marketing business sales. On paper, it was thriving, but in reality, she was generating fake invoices from fake clients and creating fake LinkedIn accounts for her fake employees, whose fake salaries were paid. in Bitcoin.
[14:18]But if this was a money laundering front, it was the weirdest one in history. Heather's one real employee at salesforce was a marketing guy, but really, she hired him for her next big project, Russell Chan. Russell Chan. The thing she better win. Come real far but don't know where I'm heading. Motherfucking crocodile wall street.
[14:53]Russell Chan was hater but dialed up to 11. Loud, flashy and completely fearless. As the self-claimed crocodile of Wall Street, Herald started flooding Tik Tok and YouTube with bizarre music videos with terrible rhymes and painfully awkward performances. I'm a motherfucking bad.
[15:15]Go on, make me a sandwich.
[15:20]Airpods, AirPods, motherfucking AirPods. Where are my goddamn AirPods? Shoma the motherfucking crocodile. What street. What street. That's another
[15:39]Sometimes she'd also include Elia in the videos and even though he was much less extreme, he didn't seem too worried about the whole thing. Russell's videos got almost no traction. And when they did, the comment sections weren't particularly nice. But more than anything, people were just asking who was this eccentric wealthy woman calling herself the crocodile of Wall Street and making painfully embarrassing rap music. No one new she was sitting on hundreds of millions in stolen Bitcoin. Well, that's not exactly true. By this point, Alpha Bay had been taken down and US law enforcement had started investigating the hack, but when one of their two suspects turned out to be on all people, they were understandably confused. High profile cyber attacks like the BitX hack are usually the work of drug cartel, foreign hackers or terrorist groups, but and didn't seem like hard crimini. They were posting videos of their cat, reviewing pancake shops and releasing cringe songs. The idea that they pulled off one of the biggest heist in history was simply ridiculous, but the more investigators looked at them, the more the pieces of the puzzle started falling in place. First was their finances. Hester and Eli lived in a luxury apartment, took first class flights and through extravagant parties. They appeared to be running successful. businesses, but those were also red flags. Sales folks employees couldn't be found anywhere outside of LinkedIn and their customers had no presence on the internet even though they were paying hater millions for marketing services. Meanwhile, I had started end pass, a privacy focused crypto wallet. Meet and pass. We protect your funds with multiple layers of security and pass, the safest and most convenient crypto wallet for So, the guy being investigated for pulling off one of the biggest Bitcoin heist in history was building software to move crypto anonymously? Sure. And then we're here's exploits on the internet. throughout this whole time, she had been writing weirdly specific articles about operational cyber security for Forbes and Inc magazine. And aside from that, on YouTube, she interviewed guests about the best cryptocurrency for laundering money. She gave about social engineering, how to manipulate people into giving sensitive information, and in Rock's rap lyrics, she was practically spelling out her crimes. your password, all your friends, the cat fish and queen. My tracks always clean, social engineers, meet me at the pair. The authorities were being handed a confession wrapped in terrible beats. But of course, none of this was admissible as evidence in court. There was always the tiny that someone had stolen their identities or that there was someone else behind everything. So, before making an arrest, the FBI needed unble proof that Hester and Ilia were the hackers. And luckily, they were about to make a fatal mistake. Five years after the hack, Hester and Ilia's stolen Bitcoin had exploded in value. During its peak in 20 1 it was worth around $8 billion and they still weren't running. Instead, they were getting married and in the most way possible. For the proposal, Elia wanted to promote Heather's rap persona. So he bought out all the ad space in time square for a few moments. The wedding itself was a bizarre spectacle. Heather was carried in like an Egyptian queen while Elise dressed like Dr. Evil from Austin Powers. 1 million dollars. During their after party, they gave away iPhones, PlayStation, and all sorts of things they had paid for with gift cards. A common way to launder money in small amounts. But that was the beginning of the end for them. because one of those gift cards, just a 500 dollar purchase was redeemed under Heather's real name. Finally, there was a complete digital trail tying Heather and I all the way to the stolen Bitcoin. By early 2020 two, the FBI had gotten a search warrant to raid their apartment, but they didn't arrest them yet. To confirm beyond any doubt that Heather and Ilia were the BitFex hackers. The FBI had to catch them with the Bitcoin, meaning they needed the private keys to their crypto wallets. Getting them was really only a matter of time, but despite knowing this, Heather and Ilia didn't flee. Russia, where Ilia was a citizen, would have been a safe haven where extradition to the US was nearly impossible. They could also go to Ukraine where he had family and fake passports. But by the time the FBI rated their apartment, both of those options were gone. In February of 2022, Ukraine became a war zone and nearly the entire world severed their relationships with Russia. Heather and I had no choice but to stay in New York and they lived like nothing was wrong. Heather just kept making Tik Toks as Putin. It was as if she had become addicted to the persona. After a few months, the FBI cracked one of the encrypted files they had seized during the raid and found the private keys to thousands of crypto wallets, one of which had the majority of the Bitcoin, and had it spent. At the time, that was worth around $3.6 billion, making this the largest cryptocurrency seizure in the history of the Justice Department. and had been living a double life. One part one part international criminal. She's just leaving the court room. She's decided not to talk to press as you can see. She's walking away with her attorney. She's just playing. But six years after the Bitcoins hack, the US government had caught them red-handed. The gig was up. breaking over night nearly 100,000 Bitcoins have been stolen from exchange platform Bitcoins. Marine from Manhattan are accused of being behind the conspiracy to land billions of dollars worth of stolen Bitcoin. Two individuals in Manhattan this morning and the seizure of a massive $3.6 billion worth of cryptocurrency. The Department of Justice has seized over $3.6 billion worth of that stolen cryptocurrency. This is the largest seizure of cryptocurrency ever by US law enforcement. The FBI arrested them soon after and when the news broke, the internet simply couldn't believe their eyes. The failed criminal mastermind behind the world's were none other than, the of Wall Street and her socially awkward husband. In the end, Bitx got their stolen Bitcoin back and they walked away from the whole deal with a fortune. But their users not so much. Remember, the customers who were affected by the hack had been refunded at the time of the hack, not in bitcoin but in its dollar value at the time of the hack. So some of them lost out on millions of dollars. Meanwhile, Heather and Ilia were facing serious consequences. Heather was released on a bail of $3 million which she paid for by putting up her parents' home and all of their assets as collateral.
[23:18]Ilia, on the other hand, had a Russian passport and potential access to other Bitcoin wallets. So the judge ruled that he was a flight risk and should be kept in custody. The authorities wanted two things from them. First, there was still $1 billion in Bitcoin that hadn't been recovered yet, so they wanted that. And second, they wanted the whole story. Now, when I played, he claimed that he acted alone in the actual hat. And most of what you've heard about me is true. I hacked Bitfinex, I stole and launched thousands of Bitcoin. Hester only got involved once she learned where the Bitcoin came from, but she became a crucial part of the moneylending operation. which she eventually confessed to as well. At their first hearing, Hera and Elia weren't allowed to speak to each other, but Elia did blow her kiss. And that's when things got weird. Suddenly, the case was postponed. Then it was labeled a matter of national security. The evidence was deemed too sensitive to be exposed in a public court room and Elia was reportedly even offered a spot in the witness protection program for a Bitcoin hack, that's extremely unusual and it raised an important question. Maybe someone else was involved. You see, something about this case doesn't add up. These days, when veterans in the hacking community examine the case. Many of them think that I never had the technical expertise to actually breach Bitfenx in the first place. But you know who might have? I's father. Back when I was just a kid when he lived in Russia. His dad managed to hack into the first National Bank of India. He got caught, but instead of going to prison, he became an offender for the US Secret Service. That's why they moved to the United States. When I was asked about this, he claimed that these days his father doesn't even know how to open Instagram. But actually, when you compare how his father hacked the bank of Indiana, and how I hacked BitFex, there are a lot of similarities. Could this mean that his father was somehow involved, maybe even Russian intelligence or some unknown third party, only I would know. In 2022, the film makers behind, biggest heist ever, a Netflix documentary about the case, reached out to Ilia in jail to ask him about this, and he actually wrote back. His message was short, but cryptic. Thank you for your kind note. As you mentioned, I am unable to discuss the case at this time. I look forward to sharing my perspective when the time is right. As your instincts probably tell you, there is more to this story than meets the eye. Best of luck, Ilia.
[26:29]So maybe we don't know the full story. Maybe we never will. Maybe the real mastermind behind the world's biggest Bitcoin heist is still out there.
