Bitfinex hacker Lichtenstein sentenced to 5 years in prison
Ilya "Dutch" Lichtenstein has received a five-year jail sentence for his involvement in the 2016 hack of the cryptocurrency exchange Bitfinex and the money laundering case that followed.
Lichtenstein was given the five-year prison sentence that the prosecution had recommended, Bloomberg reported on Thursday.
Lichtenstein receives 5 years jail sentence
The sentence was issued by the U.S. District Court for the District of Columbia Judge Colleen Kollar-Kotelly after Bitfinex hacker Lichtenstein pleaded guilty to the charges of conspiracy to commit money laundering.
Lichtenstein was charged with conspiracy to defraud the United States and conspiracy to commit money laundering, both of which carry maximum sentences of five years and twenty years, respectively.
According to reports, Lichtenstein hacked into the cryptocurrency exchange Bitfinex in 2016 and stole 120,000 Bitcoin, which was valued at $72 million at the time and $10.7 billion today. The US Department of Justice claims that he and Morgan allegedly used darknet markets, layered transactions, crypto mixers, and other strategies to launder the money. Then, in an attempt to hide his actions, Lichtenstein erased Bitfinex's network access credentials and other log files that might have revealed to law enforcement about his activities. The assets are the largest seizure ever made by the US government. Lichtenstein and Morgan entered a guilty plea to money laundering charges in August 2023 in connection with the Bitfinex hack.
Prosecutors reduce Licthenstein sentence
Licthenstein's cooperation in his investigation and others, including his testimony in the Bitcoin Fog case, led prosecutors to argue that his sentence should be reduced.
Law enforcement has seen success in reducing the number of cryptocurrency hacks. Delhi Police recently detained a suspect in connection with the $230 million WazirX hack. The suspect is accused of creating and selling a fake WazirX account on Telegram in order to compromise the security of the platform.
Lichtenstein, sometimes with Morgan's help, used a number of sophisticated stolen funds laundering strategies, such as creating online accounts under false pretenses, automating transactions with computer programs, depositing the funds into accounts at various darknet markets and cryptocurrency exchanges and then withdrawing them, "chain hopping"—converting bitcoin to other cryptocurrencies—transferring some of the criminal proceeds to cryptocurrency mixing services, using U.S.-based business accounts to legitimize Lichtenstein's and Morgan's banking activities, and exchanging some of the stolen funds into gold coins.
Heather Morgan, Lichtenstein's wife and co-conspirator going by the rap alias "Razzlekahn," is currently awaiting sentencing on November 18. Since she was less involved in the money laundering scheme, the prosecution recommended that she be sentenced to 18 months in prison.
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