Ilya Lichtenstein was sentenced Thursday to five years in prison for his involvement in a money laundering conspiracy arising from the hack and theft of approximately 120,000 bitcoin from Bitfinex, a global cryptocurrency exchange.
According to court documents, Lichtenstein, 35, hacked into Bitfinex’s network in 2016 using advanced hacking tools and techniques.
Once inside the network, Lichtenstein fraudulently authorised over 2,000 transactions, transferring 119,754 bitcoin from Bitfinex to a cryptocurrency wallet in Lichtenstein’s control.
Lichtenstein then took steps to cover his tracks by deleting from Bitfinex’s network access credentials and other log files that could have revealed his conduct to law enforcement.
Following the hack, Lichtenstein enlisted the help of his wife, Heather Morgan, in laundering the stolen funds.
Lichtenstein, at times with Morgan’s assistance, employed numerous sophisticated laundering techniques, including using fictitious identities to set up online accounts, utilising computer programs to automate transactions, depositing the stolen funds into accounts at a variety of darknet markets and cryptocurrency exchanges and then withdrawing the funds; converting bitcoin to other forms of cryptocurrency in a practice known as “chain hopping”; depositing a portion of the criminal proceeds into cryptocurrency mixing services; using U.S.-based business accounts to legitimise Lichtenstein’s and Morgan’s banking activity; and exchanging a portion of the stolen funds into gold coins.
On August 3, 2023, Lichtenstein and Morgan both pleaded guilty to one count of conspiracy to commit money laundering.
In addition to his term of imprisonment, Lichtenstein was ordered to serve three years of supervised release. Morgan is scheduled to be sentenced on November 18.
