Ilya Lichtenstein received a five-year prison sentence for his role in a money laundering conspiracy connected to the 2016 Bitfinex hack, which involved the theft of approximately 120,000 bitcoin from the cryptocurrency exchange. Court documents reveal that Lichtenstein, 35, used advanced hacking techniques to infiltrate Bitfinex’s network and authorize over 2,000 fraudulent transactions. These transactions transferred nearly 120,000 bitcoin to a wallet under Lichtenstein's control. To conceal his activities, he deleted access credentials and log files from Bitfinex’s network.
Following the hack, Lichtenstein sought assistance from his wife, Heather Morgan, to launder the stolen funds. Together they employed various laundering methods such as creating fictitious identities for online accounts and using automated computer programs for transactions. They also deposited funds into darknet markets and cryptocurrency exchanges before withdrawing them and engaged in "chain hopping" by converting bitcoin into other cryptocurrencies. Part of the stolen funds was exchanged into gold coins.
On August 3, 2023, both Lichtenstein and Morgan pleaded guilty to conspiracy to commit money laundering. Besides his prison term, Lichtenstein will serve three years of supervised release. Morgan is set for sentencing on November 18.
The announcement came from Principal Deputy Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division; U.S. Attorney Matthew M. Graves for the District of Columbia; Chief Guy Ficco of IRS Criminal Investigation (IRS-CI); Assistant Director Bryan Vorndran of the FBI’s Cyber Division; Special Agent in Charge Douglas S. DePodesta of the FBI Chicago Field Office; and Special Agent in Charge William S. Walker of Homeland Security Investigations (HSI) New York Field Office.
Investigations were conducted by IRS-CI Washington D.C., FBI Chicago Field Office, FBI Virtual Assets Unit, HSI New York Field Office with help from the Justice Department’s Office of International Affairs and Ansbach Police Department in Germany.
Trial Attorneys Jessica Peck and C. Alden Pelker from the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS), along with Special Assistant U.S. Attorney Christopher B. Brown for D.C., are handling prosecution duties with assistance from others including Assistant U.S. Attorney Jolie Zimmerman.
As per criminal forfeiture case protocols, third-party claimants may submit claims for any seized property through Rule 32.2 procedures outlined by Federal Rules of Criminal Procedure.
Further information can be accessed on the Justice Department’s website at www.justice.gov/usao-dc/2016-bitfinex-hack.