The notorious hacker responsible for one of the largest cryptocurrency heists in history has been sentenced to five years in a US prison. Ilya Lichtenstein, a 35-year-old US resident, orchestrated the hack of Bitfinex, a major cryptocurrency exchange platform, in 2016. During the hack, Lichtenstein stole a staggering 120,000 bitcoins, which was valued at $70 million at the time. However, the value of the stolen bitcoins had skyrocketed to over $4.5 billion by the time of his arrest in February 2022, and would be worth $10.7 billion at today’s rates.
Lichtenstein, a Russian-born entrepreneur and cryptocurrency investor, enlisted the help of his wife, Heather Rhiannon Morgan, in laundering the stolen funds. The couple successfully laundered approximately 21% of the stolen bitcoins, amounting to around $14 million in 2016 rates. Prosecutors revealed that Lichtenstein did not disclose the details of the theft to Morgan until 2019. Despite her involvement in the laundering scheme, prosecutors considered Morgan a lower-level participant in comparison to Lichtenstein.
To facilitate the laundering process, Lichtenstein utilized couriers he had met during trips to Kazakhstan and Ukraine to smuggle the laundered money back into the US. Over a span of five years, Lichtenstein engaged in complex money laundering techniques, as described by Internal Revenue Service (IRS) agents.
Following his arrest in 2022, Lichtenstein cooperated with law enforcement and assisted in recovering over 96% of the stolen funds, most of which had not been spent. In August 2023, both Lichtenstein and Morgan pleaded guilty to one count of money laundering conspiracy. During Lichtenstein’s sentencing hearing, US District Judge Colleen Kollar-Kotelly emphasized the meticulous planning of the theft and stressed the importance of holding individuals accountable for such crimes.
Despite taking full responsibility for his actions, Lichtenstein requested that his wife be spared from serving any prison time. Morgan’s sentencing hearing is scheduled for November 18, where her fate will be determined. As the cryptocurrency industry continues to grapple with security threats and cybercrimes, the case of Ilya Lichtenstein serves as a stark reminder of the consequences of engaging in illegal activities within the digital asset space.