Federal Prosecutors recommended a five-year sentence for 2016 Bitfinex hacker Ilya Lichtenstein. The severity of his crimes would warrant longer prison time, but his extensive cooperation earned him a reprieve.
Lichtenstein’s wife and partner in crime, Heather “Razzlekhan” Morgan, received only an 18-month sentence from prosecutors.
Bitfinex Hackers Go Down
Federal prosecutors filed a sentencing memorandum for Bitfinex hackers Ilya Lichtenstein and Heather Morgan on October 15. Both hackers pled guilty to the charges.
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This comes shortly after the authorities reached a major step in the restitution process for former Bitfinex users. The prosecutors’ instinct was to lay down a punitive sentence, which they justified at length:
“Criminal activity in… online spaces… is normalized in a way that trivializes the impact on the victims. A strong sentence in this case will help to break this cycle [and] send a needed message to other crypto criminals who might otherwise believe they can commit crimes with impunity,” the memorandum reads.
Despite these strong instincts, prosecutors also recognized Lichtenstein’s extensive cooperation with law enforcement. He revealed extensive details of the actual hack and also testified against Bitcoin mixers and money launderers that helped him evade capture for years.
In other words, crimes of this magnitude would normally warrant a sentence between 10 and 12 years, but prosecutors recommended only five. Also, his wife, Razzlekhan’s actions have created an outsized public notoriety; her crimes were ultimately deemed less serious.
Still, prosecutors were very wary of Lichtenstein’s continued rehabilitation. They described the sophistication of the 2016 hack, Bitfinex’s extensive safeguards, the length of time the hackers evaded justice, etc. The memorandum even notes Lichtenstein’s abuse of prescription drug Adderall during these crimes and states the importance of his continued treatment.
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In short, the saga of this world-famous exchange hack is coming to an end. The sentencing agreement includes a clause that the hackers renounce all claims to stolen assets, many of which have been seized. This move may be a formality, but it will make the restitution process smoother.
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