Hacker Ilya Lichtenstein has been sentenced to five years in prison for his involvement in a conspiracy to launder funds stolen in a cyberattack on the cryptocurrency exchange Bitfinex, according to a report from the U.S. Department of Justice.
What Happened
Court documents reveal that in 2016, Lichtenstein infiltrated the Bitfinex network and conducted over 2,000 transactions, transferring 119,754 BTC (approximately $10.7 billion at current rates) to a wallet under his control. To cover his tracks, he deleted credentials and access logs that could expose his actions to law enforcement. Following the hack, he enlisted his wife, Heather Morgan, to assist in laundering the stolen funds.
The exact amount successfully laundered by Lichtenstein is not disclosed in the case files. However, a significant portion was frozen and confiscated during the investigation. At the time of the theft in 2016, the stolen funds were valued at approximately $72 million. With Bitcoin's price surge, their market value later exceeded $4.5 billion and now stands at $10.7 billion.
To legitimize the stolen bitcoins, Lichtenstein employed numerous schemes, including the use of crypto mixers, converting funds into gold coins, and depositing them into darknet accounts for subsequent withdrawal.
Sentencing and Further Measures
The investigation was conducted by agents from IRS-CI, the FBI, and the U.S. Department of Homeland Security, with support from international partners, including German law enforcement. Prosecutors from the Computer Crime and Intellectual Property Section (CCIPS) and the U.S. Attorney's Office for the District of Columbia led the case.
Lichtenstein and Morgan pleaded guilty to conspiracy to launder money. Lichtenstein was sentenced to five years in prison and three years of supervised release. Morgan is scheduled to be sentenced on November 18.
Additionally, assets seized from Lichtenstein and Morgan will go through a formal forfeiture process.
This case has become one of the largest investigations in the history of cryptocurrency-related crimes. Further details about the case are available on the Department of Justice website.