Ilya Lichtenstein has been sentenced to five years in prison for his role in the 2016 Bitfinex hack, where 120,000 bitcoins were stolen.
Bitfinex Hack and Money Laundering Exposed
Court documents reveal that Ilya Lichtenstein used 'advanced hacking tools' to breach Bitfinex's network. He fraudulently authorized over 2,000 transactions, transferring 119,754 bitcoins to a cryptocurrency wallet he controlled. To evade detection, Lichtenstein deleted access credentials and log files from Bitfinex's network. He then enlisted his wife, Heather Morgan, to launder the stolen funds.
The DOJ described the laundering scheme as 'particularly sophisticated.' They used fictitious identities to create online accounts and automated transactions with computer programs, depositing stolen funds into various accounts associated with darknet markets and cryptocurrency exchanges.
Bitfinex Declared Primary Victim
Recently, the US District Court for the District of Columbia ruled in favor of Bitfinex, affirming it as the sole entity entitled to restitution for nearly 120,000 stolen BTC. This legal victory prompted the US government to acknowledge Bitfinex as the primary victim while recognizing that 'numerous individuals and groups' may have been impacted by the theft. Despite this acknowledgment, the government faces challenges in identifying all affected account holders. Plans are underway to leverage the Department of Justice's website for 'large cases.'
Cryptocurrency Market Update
At the time of writing, the largest cryptocurrency on the market, Bitcoin, is trading at $88,520, up 16% every week, although it has pulled back in the past 48 hours from its all-time high of $93,250 hit on Wednesday.
Lichtenstein and his wife pleaded guilty to conspiracy to commit money laundering. In addition to his prison sentence, Lichtenstein was ordered to serve three years of supervised release. Morgan's sentencing is scheduled for November 18.
