Ilya Lichtenstein sentenced to 5 years in prison for his role in the Bitfinex hack

Ilya Lichtenstein, a 35-year-old programmer, was sentenced to five years in prison for his part in laundering stolen Bitcoin from crypto exchange Bitfinex.

The U.S. Department of Justice (DOJ) announced the conviction, marking a significant development in a case involving the theft of nearly 120,000 BTC, valued at $71.8 million in 2016 but worth more than $4.5 billion. dollars at the time of his arrest in 2022.

The Bitfinex hack

According to court documents, the 35-year-old was responsible for infiltrating the Bitfinex network using sophisticated hacking tools. Once inside, he transferred 119,754 BTC from the exchange to a crypto wallet under his control by executing over 2,000 unauthorized transactions.

Following the hack, Lichtenstein attempted to cover his tracks by deleting Bitfinex network credentials and log files, which could have provided evidence to investigators. He then asked his wife, Heather Morgan, to help him launder the stolen loot.

The DOJ revealed that Lichtenstein and Morgan used several techniques to conceal the origins of the stolen cryptocurrency. These included the use of fake identities to create online accounts, the deployment of software to automate transactions, as well as the conversion of Bitcoin into other cryptocurrencies, a tactic known as “jumping”. of chain”.

Additionally, the couple deposited some of the stolen funds into darknet markets and several crypto exchanges and then withdrew them to various accounts to evade tracking.

They also used cryptocurrency mixing services such as Bitcoin Fog to anonymize transactions and opened U.S.-based business accounts to make their banking business appear legitimate. Additionally, Lichtenstein and Morgan converted some of the money into gold coins.

Lichtenstein’s conviction

The Bitfinex hack of 2016 remains one of the largest known cybercrimes in digital assets. Although initially suspected only of money laundering, Lichtenstein later confessed to being the hacker behind the breach.

However, despite his admission, neither he nor Morgan were directly accused of performing the feat. Instead, both pleaded guilty on August 3, 2023, to a single count of conspiracy to commit money laundering, a charge that carries a maximum sentence of up to 20 years in prison. .

After their arrest in February 2022, law enforcement located and recovered approximately $3.6 billion in stolen Bitcoin. Part of these funds was returned to the stock market.

In addition to his five-year prison sentence, Lichtenstein will serve three years of supervised release following his sentence. Morgan, meanwhile, is scheduled to be sentenced on November 18.