Bitfinex Hacker Ilya Lichtenstein Gets 5-Year Prison Sentence For Bitcoin Heist

Bitfinex hacker, Ilya Lichtenstein, has been sentenced to five years in prison for his involvement in one of the largest cryptocurrency thefts in history. Lichtenstein and his wife, Heather Morgan, were arrested in February 2022 after authorities linked them to the 2016 crypto hack of Bitfinex, resulting in the theft of 119,754 Bitcoin.

Judge Colleen Kollar-Kotelly of the United States District Court for the District of Columbia issued the sentence following Lichtenstein’s guilty plea to conspiracy to commit money laundering.

Bitfinex Hacker Jailed for Multi-Billion Bitcoin Theft

In a recent ruling, Judge Kollar-Kotelly sentenced Bitfinex hacker Ilya Lichtenstein to five years in prison. This sentencing follows Lichtenstein’s admission to hacking the Bitfinex cryptocurrency exchange in 2016, where he facilitated the unauthorized transfer of 119,754 Bitcoin, initially valued at around $71 million.

Since the hack, Bitcoin’s value has risen, elevating the stolen assets’ worth to billions. Lichtenstein, a self-described “computer expert,” used advanced hacking methods to infiltrate Bitfinex’s systems and conduct more than 2,000 unauthorized transfers.

Following previous recommendations by U.S. prosecutors, District Judge Colleen Kollar-Kotelly sentenced Ilya Lichtenstein to five years in prison, aligning with the prosecution’s request. The judge cited Lichtenstein’s assistance in other criminal investigations as a factor in granting a sentence below the 20-year maximum. 

His cooperation reportedly aided law enforcement in multiple cases, which ultimately contributed to the court’s leniency. His wife and accomplice, Heather Morgan, is scheduled to face sentencing on Nov. 18. Prosecutors have suggested a lighter sentence of 18 months for her, considering her role in supporting Lichtenstein.

Complex Laundering Tactics Employed in Crypto Hack

After the hacking incident, Lichtenstein together with Morgan proceeded to use elaborate techniques in an attempt to conceal the stolen Bitcoin. Such actions included making small fund transactions, using different accounts, names, wallets and jumping from one exchange to another. The couple also used the Darknet markets and other encrypted services to attempt to sever the transaction chain.

Their crypto hack techniques comprised cashing out the stolen Bitcoin through gold and other various assets like nonfungible tokens (NFTs). As alleged by prosecutors, these tactics were systematic and described strategies to avoid detection.

Nevertheless, the U.S Department of Justice arrested Lichtenstein and Morgan in February 2022 after they traced their laundering structure. Federal prosecutors linked the couple to thousands of Bitcoin transactions, marking a breakthrough in one of the crypto industry’s most notorious hacks. Consequently, Lichtenstein and Morgan pleaded guilty to charges of conspiracy to commit money laundering and defrauding the United States.

Law enforcement’s efforts to curb rising crypto hacks have yielded results. In a recent case, Delhi Police arrested a suspect linked to the $230 million WazirX hack. The suspect allegedly created and sold a fake WazirX account on Telegram, which was used to breach the platform’s security.

✓ Share:

Ronny Mugendi

Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.