Hacker Sentenced to Five Years for Major Bitcoin Theft

A US court has sentenced Ilya Lichtenstein to five years in prison for hacking and laundering nearly 20,000 stolen bitcoins from the Bitfinex exchange. His wife, Heather Morgan, who assisted in the laundering, is awaiting sentencing.

Ilya Lichtenstein, a notorious hacker, has been sentenced to five years in a United States federal prison for his role in laundering the proceeds from one of the largest cryptocurrency thefts in history. Lichtenstein pleaded guilty last year to orchestrating a significant breach of the Bitfinex cryptocurrency exchange in 2016, in which he stole almost 20,000 bitcoin. At the time of the crime, these digital assets were valued around $70 million (£55.3 million), but by the time Lichtenstein and his accomplices were apprehended, their worth had skyrocketed to over $4.5 billion.

The fruits of their illicit activities led to the largest financial seizure in the history of the U.S. Department of Justice (DoJ), with $3.6 billion in assets reclaimed, according to Deputy Attorney General Lisa Monaco. During the sentencing, District Judge Colleen Kollar-Kotelly emphasized the importance of enforcing accountability with regard to crimes in the digital currency sphere, underscoring that there are significant consequences for such actions.

Since his arrest in February 2022, Lichtenstein has expressed remorse for his past behavior and has indicated a desire to redirect his hacking expertise toward preventing cybercrime following his prison term. Heather Morgan, his wife and co-conspirator, also faces legal repercussions and is set for sentencing on November 18. Morgan was charged with conspiracy to commit money laundering, collaborating closely with Lichtenstein to disguise the origins of the stolen bitcoins.

Court documents reveal that Lichtenstein employed advanced hacking methodologies to infiltrate the Bitfinex platform and, after executing the hack, recruited Morgan to assist in laundering the ill-gotten gains through a complex labyrinth of financial maneuvers. These involved creating fictitious identities, converting funds across different cryptocurrencies, and even purchasing gold coins.

Despite their attempts to obscure their criminal undertakings, Morgan, who assumed the pseudonym Razzlekhan in her hip-hop career, garnered significant attention on social media, releasing numerous music videos that included self-aggrandizing lyrics. While asserting her identity as a "bad-ass money maker" and dubbing herself "the crocodile of Wall Street," she also showcased a dual persona as a technology entrepreneur, claiming expertise in various business ventures in articles published by Forbes.