Millennial couple CAUGHT for attempting to launder billions in Bitcoin | Exactly HOW they did it

You've seen the headlines, but let's breakdown the cryptocurrency laundering techniques they allegedly used in an attempt to launder billions of dollars worth of Bitcoin and the ridiculous errors they made that led to them getting caught.
Money laundering techniques they are accused of using: Peel chain technique, Chain Hopping, Layering, and more.
On February 8th, 2022, the United States Department of Justice announced that 34 year old “Dutch” Ilya Lichtenstein, and 31 year old Heather Morgan who goes by "RazzleKhan" on social media and even has her own catch phrase, were arrested in New York and charged with conspiring to launder $4.5 billion of stolen Bitcoin and conspiracy to defraud the United States.
Six years ago, 119,754 bitcoin was stolen from one of the biggest virtual currency exchanges in the world, Bitfinex. At the time, the value of those coins would have been about $72 million. As of the time I’m recording this video, one bitcoin is valued at $44,047 so the total number of coins stolen would have a current value of just under $5.3 billion. The government has seized $3.6 billion worth of cryptocurrency linked to that hack.
00:00 Intro
01:00 What are they charged with?
01:30 The Bitfinex hack of 2016
03:00 Who is this couple?
04:00 The Crocodile of Wall Street
05:40 How did they try to launder Bitcoin?
07:15 The "Peel Chain Technique"
08:00 Money laundering "Layering"
09:45 Tumbling strategy
11:14 Chain Hopping technique
12:35 Summing up how they got caught
13:05 Final Thoughts
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[@PreetBanerjee]

Typo at 6:40 - Should be $3,629,000,000 (missing the last set of zeroes) Contents and timestamps: 00:00 Intro 01:00 What are they charged with? 01:30 The Bitfinex hack of 2016 03:00 Who is this couple? 04:00 The Crocodile of Wall Street 05:40 How did they try to launder Bitcoin? 07:15 The "Peel Chain Technique" 08:00 Money laundering "Layering" 09:45 Tumbling strategy 11:14 Chain Hopping technique 12:35 Summing up how they got caught 13:05 Final Thoughts

[@mickeydrago9401]

You remind me of both Andreas Antonopoulos and Michael Saylor screwing up the total number of Satoshi by 2140, 2.1 quadrillion but both of them have said 21 quadrillion (corrected later by Michael Saylor, and a childish response from Andreas in one of his videos with no contrition)... A mistake by a factor of 10, Your mistake a hundred times worse 😘

[@gardensofthegods]

Preet , of all the channels I watched you are the only one who explains exactly what they did and how they did it .

[@sai.4589]

@@mickeydrago9401it is crazy that you care that much about a simple mistake. fuck off

[@SuperZed21]

They screwed up by trying to cash out for fiat currency, their greed to cash out is what caused their downfall if they were patient and smart they would have not cashed out and just waited until fiats all failed and cryptos became dominant.

[@chasjacks9378]

Super, you are right but greed plays in to scam. Better to trade SMALL amounts to other coins and cash out maybe monthly.

[@1973nader]

Exactly. They should’ve bought a huge yacht paid in bitcoin and travel the world for the rest of their lives

[@robbytherob]

Hahahaha. “Fiat currency”. You are so naïve. Tell me, which commodity is bitcoin backed by?

[@mzsiel3736]

@@robbytherob damascus

[@robbytherob]

@@mzsiel3736 What?

[@unknown-x-1777]

He should have saved all the keys on a bunch of thumb drives and dig a bunch of holes all over and hide them in them. Then wipe and destroy all devices. He got caught red handed, if they didn't have the proof it could have been explained as identity theft.

[@curties]

there is a reason why Monero and similar "privacy coins" are delisted on the "trying to be legit" exchanges lol

[@gigemags1991]

And still no one can find or knows who Satoshi Nakamoto really is.

[@ricko13]

is Russia

[@dcloes]

And it took digging in on an archive of an old message board and luck to find out who Dread Pirate Roberts was.

[@onebadmoto5081]

“Yeah, what about it? - Well, how does it work? - It's pretty brilliant. - What it does is, every time there's a bank transaction where interest is computed, you know, thousands a day, the computer ends up with these fractions of a cent, which it usually rounds off. - What this does is, it takes those little remainders and puts it into an account. - This sounds familiar. - Yeah, they did it in Superman III. - Right. - An underrated movie, actually. - And then, there were a bunch of hackers that did it in the '70s as well. One of them got busted. - Well, so they check for this now. - No, here's the thing. Initech's so backed up with all the software we're updating for the year 2000, they'd never notice!”

[@airplayrule]

My stapler

[@ChaceBonanno]

They went so far to obfuscate the transactional flow, and then got gold sent to his home address, a US kyc cex account in his real name, used a Walmart account linked to his address and name, and logged everything in a cloud. It’s incredible how smart they were to pull this all off, but how dumb they were trynna get away with it. Always OPSEC lessons to be learned from these kinda stories.

[@ivangutierrez8684]

can't wait to see the Netflix doc on this soon.. so interesting

[@adilusa]

Netflix is a profeminist garbage.

[@azteca8037]

@@adilusa exactly. Everything is gay and sexualized

[@ifizs1292]

when Netflix lunsh the doc??

[@walan420]

the host giggling at genghis khan with more pizzazz is all i needed from this video lol

[@lordbeerus7803]

It's easy.. The banks would have informed the government about huge transactions coming into these couples accounts,prompting investigations.the exchange sending the funds into the bank would have been pressured into disclosing the customers(who would've probably disclosed their details when registering).

[@WolfBoehme]

Preet, You are amazingly talented. This is extremely well produced. You are an amazing presenter. I've subscribed. You are clearly very successful but i predict even bigger things for you and your channel

[@PreetBanerjee]

Thank you so much, Wolf. I really appreciate the support and encouragement!

[@randylibby2523]

Nice info, thanks for the time to explain this. Very interesting..

[@Alexalex-ig6hg]

Actually, this proves that the blockchain is the key to stop money laundering, as it is public, can be accessed at any time, and can be trace back to you.

[@jamesrav]

this was a very slow-motion crime, the fact they didnt do more with it right away is stunningly dumb. I guess being HODLer was a bad idea in this case. Get a few million out of ATMs in the months after the crime and disappear. The gal who ran the One Coin fraud (which a friend lost several thou on) is still on the run with her millions.

[@76biggdogg]

Exactly! This is why the mainstream is always telling you how bad it is , lol. No Bitcoin transactions are anonymous ,lol

[@2_2_4_3]

Makes sense but my mind was blown. Thank you for the explanation.

[@mugala1]

STILL LEAVES US WITH MANY UNANSWERED QUESTIONS; 1. Switching from one currency to another is done hu many eg- if moving gala costs a fortune as an ER20 token, moving funds as XRP then repurchasing/swap for Gala on Metamask for example, would be cost effective. Has nothing to do with layering etc. 2. Many have complained of fake reports generated by some crypto ExCh, . Where one buyer has had less than $1k in business transactions, yet he or she has received a year end report they have provided/generated says $500k??? In business volume? Kucoin for example, Imagine in 10yrs from now,, What that would look like!!! A $5m defraud [kind of rubbish alibi setting, and what would it imply? What does such and tone imply? Its like editting one's academic transcript! From rhe look of things, It seems they have programing knowledge, How on earth could they have deposited such amounts on custodial drive like ¡Cloud? This brings us to another question based on the movie Eagle Eye, 2008. Did the couple really order the gold? Are they a threat to the establishment? How? We are living in times when the public is getting more and more inversive and wants to kmow. Passivism, is no longer considered safe, rather cannot be trusted. It is just as bad as propaganda or worse.

[@MixedUpMoney]

Preet why do you have to make me spit out my lunch with the Razzlekhan catchphrase

[@PreetBanerjee]

I hope it wasn't a good lunch! :P

[@richsalazme]

So basically.. you should use a tumbling seevice that don't keep logs? Therefore removing the trace of transactions pointing to you. Also, keep every backup and keys on a hardwar device not connected online.

[@ilyasalcantara6450]

i don´t understand the process explained at 7:22 where have these transactions been sent to and how is it possible to peel a small amount off and send it alpha bay accounts within the same transaction?

[@drewonaiyekan]

very nice. Good presentation and right up to the moment Preet.

[@PreetBanerjee]

Thank you!

[@longstoryshortpublishing]

They should have used a VPN for the cloud storage and the server.

[@suicidekika]

I loved your conclusion about this. Good video! Thank you for it.

[@pangunadi1726]

Thank you for the info very interesting how you explained 👍🏻👍🏻👍🏻

[@Tanya401life]

This by far is the best explanation I’ve found online or in the media. New subscriber added! Thanks for such great content.👍🏽

[@PreetBanerjee]

Awesome, thank you!

[@Smoothinlife]

But how did they manage o get the bitcoins? You did not cover this part of the Story ;) Thanks for the video!

[@speedacademydave]

Great storytelling, Preet! Moral of the story: crypto isn't just for anti-authoritarians, it's also for part-time magicians and Genghis Khan enthusiasts.

[@PreetBanerjee]

We could all use more pizazz in our lives 🤪

[@PreetBanerjee]

@@Electrothebear They face up to 25 years in prison (20 for conspiracy to launder money and 5 for conspiracy to defraud the US government)

[@DinoCism]

Nothin more anti-authoritarian than falling for/profiting from a scam. Crypto is basically an MLM for techbros... and whatever the female in this video counts as...

[@MicDropBBQ]

LMAOOOOOOOOOOOOOOOOO! HAHAHAHAHAHAHAHAHAHA! Moral of the story.....LOL!

[@AbdulForexInvesting]

@@PreetBanerjee Woah that's a lot of money

[@chasjacks9378]

Someday these people will be on an episode of “Stupid Criminals.”

[@lordbeerus7803]

Defraud the United States?. Does the United States also invest in cryptos? 😳😳

[@dcloes]

They want their cut!

[@craffte]

I think the "occasional magician" moniker, though tongue in cheek, is a little smug. And overkill.

[@vijikumar2088]

I do not know anything about these couple neither have I seen any of their videos but yes as you rightly mentioned it is very very scary .whom to believe whom not to

[@golumolu5334]

First rule of life never be on media when u r theif

[@snowfreeze]

Correction, he ilya was NOT released.

[@lgimeno29]

I listened to your podcast yearsss ago! I'm glad this popped up on my recommended videos! Glad to see you're creating content again!

[@sofuno863]

so basically there is no privacy lol

[@mbahmarijan789]

12:40 which cloud? And how the decrypt the encrypted file containing addresses and keys?

[@PreetBanerjee]

I don’t know

[@jiggajhood]

Funny that they couldn't track down the brother who started an exchange and ran off with billion. But you said it traceable 🙄

[@KenSherman]

3:29; 4:08 Guess history wanted to repeat itself since "Heather" wrote a post referencing the panDEMIC and her moniker referencing Genghis Khan was a 1-man epiDEMIC. 😄

[@jbara7499]

Curious as to who were the victims of this crime?

[@ocavant]

You were....if you live and pay taxes here in the United States of America.

[@CM-vu5kf]

@@ocavant this whole ordeal had absolutely NOTHING to do with taxes .did you even hear the story?

[@nonnegotiable2777]

In order to avoid paying taxes, you need to create two paper wallets anonymously (under two different connections) and send coins anonymously to one paper wallet (then create a third connection). Then you send the coins to a tumbler under a third connection. After that, you send them coins (from the tumbler) to the second wallet under a fourth connection. As long as you do this and have good opsec (no massive purchases), you can dodge the government.

[@VibesOfTheWrath]

An exchange is not a secure place for Bitcoin

[@frogkidrex2976]

REALLY good, but you should add some small music in the backround. Not much happens other then you talking and it makes me a lil bored since all Im seeing is Text and images and voice.

[@craffte]

Ok hearing the word Walmart makes the whole thing so much tackier. What is it about this world that is sooo.....homemade bedazzled baseball hats?

[@thomastimmer6599]

The penalties are far too lenient and should be tough. Hackers know what they are doing. Only extremely harsh penalties also deter.

[@PreetBanerjee]

Agreed!

[@jasonsmith5688]

What is it with these KZbin subscriptions coming days after the video was made? Wtf!! SafeMoon at 17 and you’re saying it might pump up , it’s at 12 now? Why can’t these videos find their way to subscribers after they’re made, getting them days later is useless to everyone!

[@randomcats8619]

Hi buddy this is a great video so I click the like and subscribe great job

[@FidelHimself]

What was ghengis khans net worth?

[@redrustyhill2]

The entie orient

[@Jung1981giggles]

Wow very interesting , they nearly got away with it

[@LeetGarra]

Wow the level of detail that went into this video to make it understandable even with how complex the laundering process was, is just amazing.

[@PreetBanerjee]

Thank you so much!

[@yello2suma]

I had that exact same thought while I was watching the video @Grey Line. Thank you for your efforts @Preet

[@SteveDoesEverything]

Same to Bitcoin's max supply of 21million coins, Epic cash is different in the way of censorship resistance and privacy baked in. Light block chain of roughly 2 gigs in size, and addresses are not stored on the chain.

[@trajectoryunown]

How could someone who's a so-called expert in cyber security be incompetent enough to keep a list of accounts with stolen money in a cloud tied to their name? Encrypted or not. Why was that online and not on micro sd cards hidden in a door and in the floor or something? ffs. How can someone so utterly inept pull off something like this in the first place? This legitimately frustrates me. Excellent presentation, my guy.

[@sigmachef-youtubetravler5718]

This is all staged -- Most of the world events are staged

[@Foolish188]

@@sigmachef-youtubetravler5718 Your post is staged. As is this one.

[@philc.411]

You are correct, it just doesnt make sense. Sorry, doesnt add up.

[@8bitchiptune420]

Some people are experts, but still dumb

[@usmcxsandman3851]

They don’t need to know how you did it. They just need to know what you have now at this point. How do they know what you have at this point is because they have relieved you of your burden of privacy. That’s why they wanted to look at everyone’s bank accounts over 600$ but the thing is they were already doing it.

[@futureoutfit]

I've never heard anyone say bitcoin is anon mate

[@SweetPstube]

Why did it take so much time to indict?

[@beelikehoney]

what a great story

[@ebb2421]

and so global governments want to pivot to digital currency to track your every purchase...

[@slickmechanical]

Their method seems overly complicated. I don't understand why they couldn't use a swapping wallet like Atomic wallet or something to turn btc into ZEC or some privacy coin which they could have sent to a metamask wallet hooked up to a dex like uniswap and swapped it into xmr and sent 10 times to 1000 different wallets. Each wallet could swap into something different from eth to ada or back to btc and the authorities would have no idea how to follow it. Once you're in privacy coins the trail is opaque at best and you don't need a kyc exchange to swap into them

[@eddym5532]

Lot of people getting burned big time with those bitcoin. Greed my friend, greed.

[@teddy_miljard]

I wish I had been working that day in the laundry!

[@pstoneking3418]

Nah! That could have put you in the federal prison laundry room.

[@americancitizen748]

The art of obfuscation.

[@isandorgaming9064]

Im missing something. Is Bitfinex getting the BTC back that the feds confescated? And there for the btc of the costumers? Couldnt find anything about this part. Looking forward to your info/ news. Cheers for the content!

[@eman2956]

At 1:13 they deserved to be arrested of by that

[@PreetBanerjee]

1000% agree 😂

[@MS2Shinobi]

cool beard heres a like!

[@PreetBanerjee]

I'll take it!

[@kingmike40]

I guess 30 is the new 15.

[@robbo3132]

Really great recap....they seem such unlikely crims.....you did great research to put this together but I'm still not sure of the best way to launder my bitcoins....thoughts?

[@misclic2408]

looks interestin ... ty

[@blueice3124]

They should have went for ETH and sent it to tornado cash

[@thestonemaster81]

Should have put 10 million dollars in a wallet and sent it in the mail to the Democratic and Republican Parties. at the very least they would have had political cover.

[@GreenGateTV]

Should've had a V8 and used Monero

[@anucherokee2309]

no wonder the crypto market is fked

[@parkerbohnn]

Don't tell me all of them were Chinese and all of it was laundered on Canadian real estate... end of story.

[@motivationspeaks9557]

Let's make the title how to steal 2Billion worth bitcoins. Sacrifice 3.6Billion, send a few gift cards and some gold to an address and the police accidentally ceases their laptop lol.

[@amandabellz4056]

First, they ignore you, then they laugh at you, then they fight you, then you win. A fully decentralized, peer-to-peer network is unstoppable. Bitcoin is inevitable.

[@dustinbowie3616]

What strategy should a new investor like myself employ ? I started investing only this year and so far all the coins I have invested in happen to drop immediately after I get in. Do I wait for more stability before giving another try?

[@amandabellz4056]

@@dustinbowie3616 My consultant is “Stephanie Priscilla Bonillo” I found her on a CNBC interview where she was featured and reached out to her afterwards. She has since provided entry and exit points on the securities I focus on. You can look her up online with her name if you care supervision. I basically follow her trade pattern and haven’t regretted doing so. I made up $60,000 in q4 2021.

[@dustinbowie3616]

@@amandabellz4056 Amazing I'll do that right away . Thank you

[@quansun7633]

Yeah? Peer to per but still allow centralized authority to track it down and still need centralized authority to protect. Ironic much?

[@digitalcurrents]

Why would multinational companies and banks adopt Bitcoin when they can create their own cryptocurrency?

[@linuxmaster9679]

Dumb hackers!!

[@violetalight-ourrealm3518]

Man U smirked sarcastically at the right moments....I almost died laughing 🤣🤣🤣🤣🤣

[@PreetBanerjee]

You should've seen the outtakes!

[@temporayray4273]

This is what bullshit looks like. Who would go through such sophisticated lengths and ever, ever, ever, ever store their passwords and addresses on a cloud service and use their home address for any of it whatsoever? Anyhow, your presentation was EXCELLENT and thank you for it! Great work.

[@aphi1022]

so this is how the feds get back the stimulus checks

[@lynxfirenze4994]

See, buying Gold seems like a smart move. But then having it delivered to your house? Really?

[@louis-philippesavard742]

The real question is what will they do with the seized BTC, will they give back to the scammed victims or keep for themselves 🤔

[@jamesrav]

what a fortuitous outcome for the people who lost their stuff in 2016 if they get it back (and should). They become unwitting HODLers and are vastly richer than they were 6 years ago. Some people are celebrating big time right now. People with barely 25 BTC are now worth a million.

[@76biggdogg]

The regulators, government entities, etc never return the money to the victims, and rarely deter the crime before it happens.

[@kaveh8425]

They should have tried to do it in the safe haven of money launders: Canadian real estate :D

[@PreetBanerjee]

Even THEY could get away with that!

[@kaveh8425]

@@PreetBanerjee btw, the second comment after yours is from someone with your pic and a WhatsApp number. Looks suspicious …

[@PreetBanerjee]

@@kaveh8425 Yeah the spam bots are out of control. I spend almost an hour a day cleaning them and can’t keep up. Looking for a solution to help with combatting it. Think I found something so fingers crossed I can get it running in the day or two. Cheers!

[@RawLu.]

Americanization 24/7/365...

[@dapper2407]

@Preetbanejee For those who liked this video or want to know more connected to it You should check out Crypto Capital Corp. And Gerald Cotten and Quadrigacx. With loose ties to the south american cartel. Involving an NFL player lol for the front of their shadoowbank.

[@AceRimmer_]

Pulsex

[@dominicsimpson5068]

North or South ? ;)

[@cherylhurst]

Life is better with a bit of razzle dazzle

[@cherylhurst]

I really like that he’s humble enough to say “occasional magician” because it assumes he’s not magical full time.

[@Figment4126]

Nicely done sir!

[@SuperSinamatic]

Yooo you hilarious

[@regfordca]

chico crypto

[@joez7407]

i started watching this thinking i was going to bail after 15 seconds... stayed for the whole show, this was put together really well and enjoyed watching/listening. 2 bags that were perfect for one another... too bad they can't share a cell... ha ha ha. they pulled off the heist of a lifetime and were so arrogant and lazy they couldn't close it out. amazing.

[@hisroyalhighness8566]

Razzle Dazzle 😜

[@ibenzal]

So good, Preet. The video is amazing, but it's scary to know that they managed to "track" the money sent via Monero. 😬

[@PreetBanerjee]

Thanks Iban! I think the Monero transactions took place before the Monero upgrade so perhaps they might have hidden those tracks had they made those transactions later ¯\_(ツ)_/¯

[@circuitdotlt]

A crucial part is missing. How did they become a suspect? I mean, only after their laptops were ceized and everything was rapped out during an interigation, the cops could unravel the scheme, and possibly encryption keys to their notepads etc. Was it an accidental KYC-related check?? Did they rat each other out? I imagine couple like that would not go far.

[@PreetBanerjee]

They had numerous accounts frozen, so perhaps that triggered some investigations. But then there is also the original hack. Given the unsophisticated nature of some of their actions, it certainly suggests compromising "people" versus "systems" might have been in play? I'd want to interview everyone at Bitfinex and BitGo.

[@jimh8340]

it seems like those cancelled accounts and probably once they traced the stolen bitcoin to multiple prepaid cards that ended up having physical products shipped to their home addresses, hotels and travel registered in their names, that probably was enough to get the warrant to go through whatever cloud storage accounts they had. Feds likely got lucky that they were able to recover all those private keys from there, seems like not all of them were recovered though, my guess is they have them stashed somewhere on a physical offline wallet. I'm dying to know if they transferred the funds before the in person raid or after. if it was before, would have loved to have been a fly on the wall when they saw the twitter whale alert for the 94,000 coins going into a totally transparent wallet.

[@rey_nemaattori]

@@jimh8340 They were smart enough to store theirs keys as plain text in an online cloud environment

[@jimh8340]

@@rey_nemaattori according to the indictment, most of the files on cloud storage were encrypted. The feds do not disclose how they managed to decrypt, only that eventually they did break the encryption, found a spreadsheet with the wallets and then arranged the seizure of all the coins they could find into a wallet the FBI controls (Jan 31/feb1) Apparently this happened 7 or 8 days before they actually arrested them (Feb 8)

[@Foolish188]

Might have been traced backwards from the gold deliveries. Gold bought by Crypto is sure to attract the IRS.

[@jameswawrzaszek809]

Great vid. Unfortunately one of the general principles of theft/laundering remains constant, even as technology continues to take over. It's the greedy ones that get caught. Much of the smaller, but still damaging, criminal activity will continue go right under the radar.

[@benreyes3226]

People work years creating best strategies to spend usdt on profitable projects, trying staking, holding, trading. But they chose to steal. I respect myself for working and getting profit, I like seeing how my patience, work and experience turn into money, but stealing can't bring the same feeling

[@nelson8633]

Very informative, and really funny (:

[@PreetBanerjee]

Thanks, Nelson! Razzle Dazzle!

[@pepecow235]

Good video, thanks brother!

[@Jay_Kay_Redpill]

Like your style, subbed.

[@PreetBanerjee]

Thank you!

[@dmorgan0628]

I like your sense of humor Preet.

[@misspetersjonathan8114]

Lets goooo

[@mzsiel3736]

razzle dazzle!!!!! krrrrrrrrrrrrrrrrrrrrr

[@zachx333]

Excellent video!

[@PreetBanerjee]

Thanks Zach!

[@MzBrazilian87]

Not surprised honestly lol

[@karmarinchen9038]

Probably just fall guys based on all these views.