Ilya Lichtenstein, the mastermind behind one of the largest cryptocurrency hacks in history, has been sentenced to five years in prison for his role in stealing and laundering nearly 120,000 Bitcoin from Bitfinex.
The great heist
Back in 2016, Lichtenstein hacked into Bitfinex’s network and executed over 2,000 transactions to siphon off 119,754 Bitcoin into his personal wallet. At the time of the theft, those coins were worth about $71 million.
Nice loot, but nothing extraordinary. But we aren’t in 2016 anymore. Fast forward to 2022 when he was arrested, and that same stash had ballooned to $4.5 billion! Today? $10,6 billion.
Lichtenstein didn’t act alone, because he had help from his wife, Heather Morgan. Together, they devised a complex scheme to launder the stolen Bitcoin.
After the hack, Lichtenstein deleted access credentials and logs from Bitfinex’s system to cover their tracks.
They created fake online identities and used automated programs to shuffle the stolen funds through various accounts on dark web markets and crypto exchanges and so.
Mastery
The IRS described their laundering methods as incredibly intricate, and in a sentencing memo, prosecutors stated that Lichtenstein had become “one of the greatest money launderers” the government has encountered in the crypto space.
In August last year, Lichtenstein pleaded guilty to all charges against him, which could have led to a maximum sentence of 20 years.
On November 14, Judge Colleen Kollar-Kotelly sentenced him to five years in prison with three years of supervised release. However, he’ll get credit for the 29 months he’s already spent in custody since his arrest.
The good wife
Meanwhile, Heather Morgan is set to be sentenced on November 18 for her involvement in the money laundering operation.
Prosecutors have labeled her as a lower-level participant, recommending an 18-month sentence for her role in the scheme.
While Lichtenstein expressed regret for his actions and hopes to use his skills for good after serving his time, this story serves as a reminder of the risks involved in the crypto space, both for investors and those who think they can get away with illegal activities!
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