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Bitfinex money launderer ‘Razzlekhan’ sentenced to 18 months in prison

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Heather Morgan, also known by her online persona “Razzlekhan,” has been sentenced to prison for her involvement in a large-scale money laundering operation linked to the Bitfinex exchange hack. Morgan, along with her husband Ilya Lichtenstein, was convicted for conspiring to launder over $4.5 billion worth of cryptocurrency stolen in a 2016 hack of the popular crypto exchange. Morgan received a sentence of more than two years in federal prison after being found guilty of facilitating the laundering of stolen funds, much of which was transferred across various digital wallets in an attempt to obscure the illicit activity.

The hack, one of the largest in cryptocurrency history, saw nearly 120,000 Bitcoin stolen from Bitfinex users, an amount that at the time was worth roughly $72 million but has since ballooned in value. Morgan and Lichtenstein were arrested in early 2022, and U.S. authorities managed to trace and seize a significant portion of the stolen funds, ultimately recovering over $3.6 billion in Bitcoin. Their arrests were part of a broader crackdown on cryptocurrency-related crimes, signaling the increasing efforts by law enforcement to track and combat digital asset-based money laundering.

Morgan, a self-proclaimed “serial entrepreneur” and “cybersecurity expert,” gained public attention due to her eccentric online persona and social media presence. Her involvement in the laundering scheme began when she and Lichtenstein devised a sophisticated plan to move the stolen Bitcoin through a series of transactions, using fake identities and sophisticated technology to mask their activities. However, the pair’s attempts to cover their tracks ultimately failed as investigators employed blockchain analysis tools to trace the illicit funds.

The sentencing marks a significant development in the ongoing battle against cryptocurrency-related crime, highlighting both the potential for large-scale illicit activities in the digital asset space and the growing effectiveness of authorities in prosecuting such crimes. While Morgan’s sentence is a notable outcome, the legal proceedings against Lichtenstein are still ongoing. The case serves as a reminder of the risks and legal consequences associated with illegal activities in the cryptocurrency market, and it could set a precedent for future enforcement actions targeting money laundering in the sector.

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Binance tightens South African compliance rules for crypto transfers

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Binance is tightening compliance measures for crypto transactions in South Africa, announcing it will fully implement the country’s Travel Rule requirements beginning January 2025. The move aligns with regulations set by South Africa’s Financial Intelligence Centre (FIC) and reflects the exchange’s broader efforts to meet global anti-money laundering standards.

Under the new rules, Binance will require South African users to include verified personal information—such as names, addresses, and account details—when sending or receiving crypto between platforms. These changes are designed to increase transparency and traceability of digital asset transfers, making it harder for illicit actors to exploit decentralized networks.

Binance emphasized that users must complete know-your-customer (KYC) verification before transferring crypto to or from external wallets. Transfers to non-compliant platforms may be restricted or flagged, while internal transfers within Binance or to Travel Rule-compliant entities will remain unaffected.

The announcement follows South Africa’s decision in 2023 to designate crypto as a financial product, placing digital asset providers under the supervision of the FIC. The country has since taken steps to integrate crypto into its formal regulatory structure, including licensing requirements and mandatory reporting obligations.

With enforcement beginning in 2025, Binance urged users to familiarize themselves with the new procedures to avoid disruptions. The exchange also plans to provide additional guidance and tools to help users remain compliant as the deadline approaches.

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Ethereum bounces back as market dominance recovers from all-time low

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Ethereum has staged a notable recovery after recently experiencing its lowest market dominance since its early days. The turnaround comes as ETH surged nearly 4% in the past 24 hours, climbing back above the $3,100 mark and narrowing its underperformance gap relative to Bitcoin.

For much of 2024, Ethereum has trailed behind Bitcoin and a growing wave of altcoins, with its market share dropping below 15% — levels not seen since 2015. The slump was driven by investor focus on Bitcoin ETF momentum, lackluster institutional interest in ETH, and rising competition from layer-1 and layer-2 networks offering faster and cheaper alternatives.

Despite these challenges, Ethereum’s fundamentals remain strong. Data shows a healthy uptick in active addresses, transaction volumes, and total value locked in DeFi protocols built on Ethereum. Additionally, hopes remain high for the approval of a spot Ethereum ETF in the U.S., with analysts suggesting a potential turnaround in institutional flows if approved.

Traders are now watching whether this rebound signals a sustained trend reversal or just a temporary relief rally. With key upgrades and ecosystem developments still in the pipeline, Ethereum’s ability to regain dominance may hinge on reigniting both investor confidence and broader developer activity.

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SEC says it won’t re-file fraud case against Hex’s Richard Heart

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The U.S. Securities and Exchange Commission (SEC) has confirmed it will not pursue a retrial in its fraud case against HEX founder Richard Heart, effectively bringing an end to one of the agency’s high-profile crypto enforcement actions.

The decision follows a recent court ruling that dismissed several key allegations against Heart, including claims that he misled investors and violated securities laws through the promotion and sale of HEX, PulseChain, and PulseX tokens. While the SEC initially signaled it would consider further legal options, it has now opted to forgo additional litigation.

Heart, a controversial figure in the crypto world, had long denied the SEC’s accusations, framing the lawsuit as an overreach by regulators. The agency had alleged that Heart raised over $1 billion from investors while misrepresenting how funds would be used and failing to register the offerings.

With the SEC stepping back, the dismissal marks a rare instance in which the regulator has chosen not to continue a crypto-related fraud case, potentially signaling a reassessment of its approach amid growing legal pushback and mounting scrutiny over its enforcement tactics.

Although the case is now closed, legal analysts suggest the outcome could influence future regulatory efforts and may embolden other crypto founders facing similar challenges. Heart, meanwhile, has positioned the development as a vindication, reaffirming his stance that HEX and related projects were never in violation of U.S. securities laws.

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