When nameless hackers infiltrated the cryptocurrency trade Bitfinex in 2016, it shook the nascent world of digital forex and prompted hypothesis about who may need stolen what was then $71 million in Bitcoin.

However not like conventional monetary transactions, Bitcoin trades are publicly seen — shifting the cash risked revealing who was behind the heist. And so for six years, as the worth of Bitcoin soared, the loot sat in plain sight on-line as tiny fractions of the enormous sum often disappeared in a blizzard of complicated transactions.

It was as if a robber’s getaway automotive was completely parked outdoors the financial institution, locked tight, cash nonetheless inside.

After which, this month, the automotive sped off.

Within the unusual and generally shadowy world of cryptocurrency, it was as if the earth shook. Within the years for the reason that Bitfinex hacking, crypto had exploded into the mainstream, and the theft had turn out to be infamous: a bounty price over $4 billion. Ultimately, it appeared, the hackers had emerged from hiding.

However it was not the hackers who had moved the stolen Bitcoin — it was the federal government, which had seized it as a part of an investigation into two New York Metropolis entrepreneurs: one a little-known Russian émigré and tech investor; the opposite, his spouse, an American businesswoman and would-be social media influencer with an alter ego as a satirical rapper named Razzlekhan.

Charged with conspiring to launder billions of {dollars} in Bitcoin, the couple, Ilya Lichtenstein, 34, and Heather Morgan, 31, had been accused of siphoning off chunks of the purloined forex and attempting to cover it in a fancy community of digital wallets and web personas. If convicted of that and a second conspiracy depend, they may resist 25 years in jail.

The arrests shocked some acquaintances of the couple, whose goofy on-line lives appeared at odds with prosecutors’ description of them as subtle criminals with stacks of overseas forex, a number of faux identities and dozens of encrypted gadgets stashed of their Manhattan house. As they awaited a Monday court docket listening to in Washington on whether or not they need to be freed on bail, Mr. Lichtenstein and Ms. Morgan remained the topic of a confounding query: May they actually be on the heart of one in all cryptocurrency’s enduring mysteries?

The costs had been a watershed within the evolving regulation of digital forex and, to some, a step ahead within the authorities’s means to hint its unlawful laundering.

“The crypto house has at all times been seen as like a protected haven for criminals,” stated Christopher Tarbell, a former F.B.I. particular agent who helped lead the investigation into the Silk Street on-line market for unlawful medication and different illicit items.

“We’re now seeing that legislation enforcement has the data, instruments and expertise to supply some accountability in what was the brand new wild, wild west of cybercrime,” Mr. Tarbell stated.

Officers haven’t stated whether or not they imagine Mr. Lichtenstein and Ms. Morgan had been straight concerned within the Bitfinex breach. However their arrests laid naked the murky fringes of crypto tradition, the place the road between subtle digital finance ventures and childish on-line gags is razor skinny and always shifting.

Sandra Ro, who leads the International Blockchain Enterprise Council, an business affiliation that advocates for the adoption of cryptocurrency markets, stated the arrests “play into the narrative that the crypto group is populated by doubtful and fringe characters, which isn’t the case.”

“There are adults within the room,” Ms. Ro stated, “who’re constructing actual services to develop a multitrillion-dollar business responsibly.”

For a lot of who observe the business, Mr. Lichtenstein and Ms. Morgan got here off as acquainted characters in a realm the place fortune favored the boldest traders, the flashiest personalities acquired wealthy quick and a single, obtuse tweet may rattle total markets.

Virtually instantly after the arrests, the hyperactive group that discusses cryptocurrency on social media and message boards started to pore over Ms. Morgan’s weird digital path. Her movies — little-watched earlier than she was charged — had been out of the blue being shared broadly.

In a single, apparently recorded at brunch, Ms. Morgan marvels on the measurement of her plate of pancakes, sneers, stands out her tongue and wags her fingers earlier than saying that she is providing a commentary about consumerism and social media’s superficial nature.

The Bitfinex hacking was the stuff of legend, however Mr. Lichtenstein and Ms. Morgan hardly gave the impression to be suave, or refined, digital cat burglars — or the tip of a grand conspiracy.

Sharing the pancake video, one sometimes irreverent Twitter account that feedback on cutting-edge monetary markets in an all-caps parody of the Unimaginable Hulk captured a broadly expressed response to the revelation: “OK. THE HACKERS ARE NOT CIA. THEY ARE IDIOTS.”

Ms. Morgan was an everyday contributor to Forbes and Inc., writing columns that suggested her fellow entrepreneurs on how you can shield their digital forex, and recommending rapping as a type of self-care, as she did by her alter-ego, Razzlekhan (Genghis Khan, however with extra pizazz, her web site says).

Those that know Ms. Morgan stated her social media stunts had been a part of an elaborate act to confront social pressures.

“She works to free herself from numerous the scripts which might be embedded in our society,” stated Morgan Brittni Sonnenfeld, who stated she is Ms. Morgan’s cousin. “I love her for that, she has numerous energy.” Ms. Sonnenfeld acknowledged that information protection of Ms. Morgan had made her “sound a bit loopy,” and he or she puzzled whether or not Ms. Morgan’s persona might have drawn the authorities to her.

“I’m wondering, why do they need folks her? Who’re we not ? Why are they selecting this particular particular person?” Ms. Sonnenfeld stated.

The arrests additionally stunned Ms. Morgan’s buddies, who described her as a disarmingly trustworthy colleague in an business outlined by cutthroat competitors.

“It is vitally jarring to suppose somebody so open and weak with folks would have secrets and techniques,” one pal, Nora Poggi, stated. “She is somebody I care loads about.”

In court docket data, the Justice Division describes the path that it says led investigators to Mr. Lichtenstein and Ms. Morgan.

In January 2017, 5 months after hackers hit Bitfinex, a portion of what they stole was moved in small complicated transactions into accounts that the couple managed, based on a felony grievance filed in federal court docket in Washington.

“This shuffling, which created a voluminous variety of transactions, gave the impression to be designed to hide the trail of the stolen” Bitcoin, the grievance says.

Mr. Lichtenstein and Ms. Morgan had been budding tech entrepreneurs on the time. Mr. Lichtenstein specialised in cryptocurrency and coding, based on his LinkedIn profile, and Ms. Morgan had returned from the Center East, the place she targeted on forex markets.

Anirudh Bansal, the couple’s lawyer, declined a request for remark. However in court docket papers, he has made it clear that he believes the federal government’s case is weak and depends on “unsupported, conclusory leaps.”

Past Ms. Morgan’s extremely public persona, little is understood concerning the couple. They’ve been collectively for seven years and married for 3, Mr. Bansal instructed a federal Justice of the Peace choose in Manhattan on Tuesday throughout arguments over whether or not the couple ought to be launched on bail.

In saying that his shoppers weren’t a danger to flee, Mr. Bansal supplied some private particulars about them.

Mr. Lichtenstein, Mr. Bansal stated, got here to the USA from Russia when he was 6. His father works for the housing authority of Cook dinner County, Unwell., and his mom is a biochemist at Northwestern College.

Ms. Morgan, who was born in Oregon, runs a consulting agency that employs as much as 30 freelance writers at a time, Mr. Bansal stated. Her father served within the U.S. army and is a retired biologist. Her mom is a highschool librarian.

Mr. Lichtenstein’s household had immigrated to the USA to flee non secular persecution and there was “no probability” he would return to Russia, Mr. Bansal stated.

In a later letter, one other of the couple’s attorneys wrote that Ms. Morgan had frozen a number of of her embryos at a hospital in New York in anticipation of beginning a household.

“The couple would by no means flee from the nation on the danger of shedding entry to their means to have kids,” the lawyer wrote.

On the listening to, a prosecutor, Margaret Lynaugh, stated in opposing bail for Mr. Lichtenstein, a twin citizen of the U.S. and Russia, that he had an energetic Russian passport and the means and intent to flee.

The choose ordered that the couple be freed on multi-million-dollar bonds, however on the authorities’s request, a federal choose in Washington blocked their launch and scheduled the listening to on Monday.

In court docket papers, the federal government has known as Mr. Lichtenstein and Ms. Morgan “extremely subtle criminals.” Prosecutors stated they believed the couple had vital further belongings, together with a whole bunch of hundreds of thousands of {dollars} in digital forex stolen from the Bitfinex trade that had not been recovered, in addition to entry to quite a few fraudulent identities purchased on the so-called darknet, a hidden portion of the web used for illicit transactions.

The federal government says the couple had additionally established monetary accounts in Russia and Ukraine, and appeared to have been establishing a contingency plan for a life in a kind of nations earlier than the pandemic.

As proof of what they depicted as an advanced money-laundering scheme, prosecutors say in a court docket submitting that they’d traced stolen cryptocurrency to greater than a dozen accounts held within the true names of the couple or their companies.

The federal government says within the court docket submitting that when brokers executed a search warrant on the couple’s Decrease Manhattan house on Jan. 5, they recovered greater than 50 digital gadgets, together with a bag labeled “burner telephone,” and greater than $40,000 in money. Most of the gadgets had been partially or totally encrypted or in any other case password protected, the court docket submitting says.

In Mr. Lichtenstein’s workplace, brokers discovered two hollowed-out books whose pages appeared to have been minimize out by hand to create secret compartments, the submitting says. (The compartments had been empty.)

After which there was the couple’s cat.

As brokers had been about to start the search, Ms. Morgan and Mr. Lichtenstein stated they would depart their house, however needed to take their cat, the submitting says. The brokers allowed Ms. Morgan to retrieve the cat, which was hiding beneath the mattress.

However as Ms. Morgan crouched by the mattress and known as to the cat, she positioned herself subsequent to an evening stand that held one in all her cellphones, the submitting says. She then reached up and grabbed the telephone, and repeatedly hit the lock button in what prosecutors say was an obvious effort to make it more durable for investigators to look the telephone’s contents.

The brokers needed to wrest the telephone from Ms. Morgan’s fingers. Court docket data offered no additional details about the cat.

Reporting was contributed by Chelsia Rose Marcius, Kate Conger, Sheelagh McNeill and Ed Shanahan.