US prosecutors came out swinging against the Manhattan couple charged with trying to launder billions of dollars worth of Bitcoin stolen from the Bitfinex currency exchange, mocking the pair’s "bluster” in a request for bail and urging a judge to keep them locked up until trial.

Ilya Lichtenstein, 34, and Heather Morgan, 31, have "highly troubling” overseas ties and fraudulent identities as well as access to hundreds of millions of dollars’ worth of cryptocurrency that make them flight risks, the US Justice Department said in a court filing Thursday in Washington.

"Having now been charged and seeing the strength of the case, the defendants’ incentive to flee is dramatically increased,” prosecutors said in the filing.

Hours later, Chief Judge Beryl Howell granted a government request to transfer Lichtenstein and Morgan to Washington from New York and rescheduled a hearing on the bail dispute to Feb 14 from Feb 11, so the defendants can attend in person.

The US filing was a response to the couple’s argument Wednesday that they should be released on bail because the case has "significant holes” and is based on circumstantial evidence that doesn’t include supporting emails or text messages about the alleged conspiracy.

"The defence bluster in the letter brief notwithstanding, the evidence of the offence is strong,” the US said. "The government seized stolen cryptocurrency valued at the time at US$3.6bil from defendant Lichtenstein’s own account, an account which directly received the proceeds of the hack - a point that the defendants’ letter brief conveniently glosses over.”

The bail dispute is an early test for the government following the largest financial seizure ever. Lichtenstein and Morgan are accused of conspiring to launder 119,754 Bitcoin stolen during the 2016 Bitfinex heist.

The couple’s bail was temporarily put on hold by a Washington judge after the US filed an emergency request to review a New York judge’s decision allowing them to remain at home with electronic monitoring and bonds totalling US$8mil .

"This would seem to me to be a pretty strong case for denial of bail,” said Matthew L. Schwartz, a former federal prosecutor in Manhattan who’s now a white-collar criminal defence attorney and isn’t involved in the matter. "It’s a crime that involves billions of dollars and therefore the sentencing exposure is really, really high, which creates an incentive to flee.”

Prosecutors also criticised the couple’s letter for downplaying Morgan’s alleged role in the money laundering scheme by portraying her "as an unwitting bystander to any alleged wrongdoing, when she in fact played an integral role in the money laundering and fraud scheme.”

The couple argued in their earlier filing that they have already shown they’ll participate in the case by staying put even after finding out months ago that they were under investigation.

"Access to wealth, while knowing the government was zeroing in on them, did not prompt them to flee at those times, and there is no credible reason to believe that it would cause them to flee now,” their lawyer wrote.

The 2016 theft of Bitcoin currently valued at about US$4.5bil hasn’t been fully explained by US prosecutors, whose filings in the criminal case do not say who was responsible for the hack.

The case is US v. Lichtenstein, 1:22-mj-00022, US District Court, District of Columbia (Washington).

 - Bloomberg