Ilya Lichtenstein, the mastermind behind one of cryptocurrency's largest heists, has been sentenced to five years in prison for his role in the 2016 Bitfinex exchange hack and subsequent money laundering scheme.
The 35-year-old programmer admitted to breaching Bitfinex's network security and orchestrating over 2,000 unauthorized transactions that transferred 119,754 Bitcoin - valued at $71.8 million in 2016 but later worth over $4.5 billion - to his personal cryptocurrency wallet.
After executing the hack, Lichtenstein worked to hide his tracks by removing access credentials and log files from Bitfinex's systems. He then embarked on an elaborate money laundering operation with his wife, Heather Morgan, employing various techniques to obscure the stolen funds' origins.
The couple's laundering tactics included creating fake identities for online accounts, using automated transaction software, converting Bitcoin to other cryptocurrencies, and utilizing mixing services like Bitcoin Fog to anonymize transfers. They also purchased gold coins and established legitimate-appearing U.S. business accounts to conceal their activities.
Law enforcement officials successfully recovered approximately $3.6 billion of the stolen cryptocurrency following the couple's arrest in February 2022. In August 2023, both Lichtenstein and Morgan pleaded guilty to conspiracy to commit money laundering, a charge carrying up to 20 years in prison.
Beyond his prison term, Lichtenstein faces three years of supervised release. His wife Morgan's sentencing is scheduled for November 18.
The case marks a major breakthrough in cryptocurrency-related crime investigations, with over 96% of the stolen funds recovered through cooperation between law enforcement and the defendant. The recovered assets have been partially returned to the exchange.