The U.S. Department of Justice (DOJ) announced Thursday that Ilya Lichtenstein has been sentenced to prison for his role in a major cryptocurrency laundering scheme linked to the 2016 Bitfinex hack. The DOJ stated:
Ilya Lichtenstein was sentenced today to five years in prison for his involvement in a money laundering conspiracy arising from the hack and theft of approximately 120,000 bitcoin from Bitfinex, a global cryptocurrency exchange.
The court found that Lichtenstein, using advanced hacking methods, infiltrated Bitfinex’s network to divert BTC to his own accounts. According to court records, “Lichtenstein fraudulently authorized more than 2,000 transactions transferring 119,754 bitcoin from Bitfinex to a cryptocurrency wallet in Lichtenstein’s control.”
After completing the heist, Lichtenstein allegedly took extensive steps to hide his tracks, including deleting Bitfinex’s access credentials and other data that might have traced the theft back to him. “He then used the stolen credentials to illegally access the computers of the medical clinic and removed records that contained the sensitive personal information of more than 43,000 individuals, including names, addresses, birth dates, and social security numbers,” the Justice Department detailed.
Lichtenstein later enlisted his wife, Heather Morgan, to help launder the stolen funds through complex methods. Together, they reportedly used fake identities, automated transactions, and “chain hopping” to convert bitcoin into other cryptocurrencies. They also funneled money through darknet markets and cryptocurrency exchanges and used U.S.-based business accounts to make their activities appear legitimate.
In August 2023, both Lichtenstein and Morgan pleaded guilty to conspiracy to commit money laundering. Along with his prison sentence, Lichtenstein will serve three years of supervised release, while Morgan is scheduled to be sentenced on Nov. 18.
