Years after exploiting Bitfinex, Ilya Lichtenstein will now spend the next five years in jail in one of the high-profile crypto fraud casesÂ
Ilya “Dutch” Lichtenstein, the famous personality responsible for the Bitfinex 2016 hack, has received a five-year jail sentence. The hacker connived with his social-media rapper wife to launder money he acquired from hacking into the Bitfinex exchange.
Bitfinex Hacker Faces Consequences
According to a Bloomberg report, Lichtenstein pleaded guilty in August 2023 to stealing almost 120,000 Bitcoin from the Bitfinex crypto exchange in 2016. The stolen BTC was valued at $70 million at the time of the theft but rose to $4.5 billion by the time of his arrest. With Bitcoin currently priced at $88,342, the stolen BTC is now worth approximately $10.6 billion.
The court charged Lichtenstein with conspiracy to commit money laundering and conspiracy to defraud the United States. Each offense carries a potential penalty of 20 and five years, respectively. However, prosecutors argued that Lichtenstein’s sentence should be lowered due to his cooperation in his inquiry and other cases like the Bitcoin Fog case.
Meanwhile, Lichtenstein’s wife Morgan also pleaded guilty to one count of conspiracy to commit money laundering. Her sentencing is due on November 18. Court documents revealed Lichtenstein used advanced hacking tools and techniques to hack into Bitfinex. Following the hack, he asked Morgan for aid in laundering the stolen funds, using the alias Razzlekhan to promote her hip-hop music.
Prosecutors have proposed Morgan get an 18-month sentence due to the smaller role contributed. Lichtenstein’s sentencing serves as a deterrent against future crimes in the crypto and blockchain space.
Hacking TechniquesÂ
The US Department of Justice (DOJ) said Lichtenstein and his wife employed numerous sophisticated laundering techniques to hack Bitfinex. These include crypto mixers, layered transactions, and darknet markets. Prosecutors claimed Lichtenstein met with couriers while on family trips to Russia from the US and moved the laundered money back home.Â
In general, hacking has become a prevalent menace in the crypto space. Delta Prime fell victim to a private key leak in September that drained over $6 million in stablecoins from the crypto broker’s wallets. This comes shortly after El-Salvador’s Bitcoin Chivo Wallet was hacked. Despite a few hacks recorded in 2024, the total losses for the year amount to about $2 billion.
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