Bitfinex Hacker Sentenced to 5 Years for Massive Bitcoin Heist and Laundering Scheme
Ilya Lichtenstein, the mastermind behind the infamous 2016 Bitfinex hack, has been sentenced to five years in prison for his role in the theft of nearly 120,000 Bitcoin, valued at billions of dollars today. The U.S. Department of Justice announced the sentencing, concluding a years-long investigation into one of the largest cryptocurrency heists in history.
According to court documents, Lichtenstein, 35, infiltrated Bitfinex’s network in 2016 using sophisticated hacking techniques. “Once inside the network,” the DOJ stated, “Lichtenstein fraudulently authorized more than 2,000 transactions transferring 119,754 bitcoin from Bitfinex to a cryptocurrency wallet in Lichtenstein’s control.” He then attempted to cover his tracks by deleting access credentials and log files.
Following the hack, Lichtenstein and his wife, Heather Morgan, embarked on an elaborate money laundering scheme to obscure the origins of the stolen Bitcoin. Their tactics included:
- Creating fictitious identities: They set up online accounts using fake names to avoid detection.
- Automating transactions: Computer programs were used to obfuscate the movement of funds.
- Utilizing darknet markets and exchanges: The stolen Bitcoin was deposited and withdrawn from various platforms to make tracing difficult.
- Chain hopping: Converting Bitcoin to other cryptocurrencies to further obscure the trail.
- Cryptocurrency mixing services: Employing services designed to anonymize cryptocurrency transactions.
Despite their efforts, law enforcement eventually caught up with the couple. In August 2023, both Lichtenstein and Morgan pleaded guilty to conspiracy to commit money laundering.
“Lichtenstein, at times with Morgan’s assistance, employed numerous sophisticated laundering techniques,” the DOJ emphasized, highlighting the complexity of their operation.
In addition to his prison sentence, Lichtenstein has been ordered to serve three years of supervised release. Heather Morgan awaits her sentencing, scheduled for November 18th.
