Ilya Lichtenstein was sentenced to five years in prison for his role in laundering approximately 120,000 bitcoins stolen from Bitfinex, a leading cryptocurrency exchange. The case, stemming from a 2016 hack, has highlighted vulnerabilities in crypto security and laundering tactics.
Court documents reveal that in 2016, the 35-year-old Lichtenstein gained unauthorized access to Bitfinex’s network, authorizing over 2,000 fraudulent transactions that transferred 119,754 bitcoin to his own crypto wallet. He erased access credentials and logs from Bitfinex’s system to evade detection. After the hack, Lichtenstein’s wife, Heather Morgan, allegedly assisted him in laundering the funds.
Lichtenstein and Morgan reportedly used a range of sophisticated tactics to obscure the money trail. These included setting up accounts under fake identities, automating transactions, and using darknet markets and crypto exchanges to shift the stolen assets. The pair also “chain-hopped” the funds—converting them into other cryptocurrencies—and used mixers to further anonymize the assets. Some stolen funds were reportedly converted into gold coins, while U.S.-based business accounts were used to mask their banking activity.
The couple pleaded guilty to conspiracy to commit money laundering on August 3, 2023. Lichtenstein’s sentence also includes three years of supervised release, while Morgan’s sentencing is scheduled for November 18.
The case involved cooperation between several U.S. law enforcement agencies, including the IRS, FBI, and Homeland Security, and international partners like the German Ansbach Police Department.
