A hacker who stole and laundered billions of dollars in Bitcoins from the Bitfinex exchange has been sentenced to five years in prison. Ilya Lichtenstein and his wife, a social media rapper, pleaded guilty last year to laundering $4.5 billion worth of Bitcoin at the time of recovery.
According to court documents cited by the U.S. Department of Justice in a statement on Thursday, Lichtenstein hacked into the Bitfinex network in 2016 using sophisticated hacking tools and techniques.
“Lichtenstein fraudulently authorized more than 2,000 transactions, transferring 119,754 Bitcoin from Bitfinex to a cryptocurrency wallet controlled by Lichtenstein.” In addition, the lawyers noted that Lichtenstein spent months trying to access Bitfinex’s infrastructure and obtain the authorizations he needed.
From January 2017 until their arrest in February 2022, the pair attempted to liquidate some of the stolen funds. In October, U.S. prosecutors urged a judge to impose a longer sentence on Lichtenstein for his involvement in one of the largest attacks on cryptocurrencies. “Lichtenstein was ordered to serve three years of supervision. Morgan is scheduled to be sentenced on November 18.”
Thursday’s verdict marks a significant end to a seven-year investigation that involved multiple US agencies. The investigation involved the IRS Invest igations Unit, the FBI, Homeland Security Investigations and blockchain analysis firm TRM Labs.
“For more than half a decade, the accused used what IRS agents described as the most sophisticated money laundering techniques they had seen to date.”
In addition, Lichtenstein enlisted the help of his wife, Heather Morgan, in laundering stolen funds. The couple used numerous sophisticated laundering techniques, including using fictitious identities to set up online accounts, the statement read.
District Judge Colleen Kollar-Kotelly said before handing down the sentence: “this is so serious that it cannot be compared to other crypto crimes.”
Lichtenstein’s previous hacks
Although Ilya Lichtenstein had no criminal history prior to his arrest in connection with the Bitfinex hack, this was not his first heist. According to prosecutors, he illegally transferred a small amount of PayCoin in 2015 , experimenting with other hacks and financial frauds.
“Sometime before 2016, the defendant obtained the credentials for the application programming interface (API) of another virtual currency exchange and stole about $200,000,” the memo said – The prosecutors’ memo reads.
