Hacker Who Stole $11 Billion Worth of Bitcoin From Bitfinex Sentenced to Five Years in Prison

Ilya Lichtenstein used advanced hacking tools and techniques to break into Bitfinex's network in 2016. After hacking the system, he authorized more than 2,000 transactions transferring 119,754 bitcoin from Bitfinex to his own cryptocurrency wallet.

A hacker who stole nearly 120,000 bitcoin from a global cryptocurrency exchange was sentenced to five years in prison last week, a theft that would be valued at nearly $11 billion today.

According to the U.S. Department of Justice (DOJ), Ilya Lichtenstein, 35, used advanced hacking tools and techniques to breach Bitfinex’s network in 2016. Once inside the system, he authorized more than 2,000 transactions that moved 119,754 bitcoin from Bitfinex to his own cryptocurrency wallet.

“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,” the DOJ said. “Following the hack, Lichtenstein enlisted the help of his wife, Heather Morgan, in laundering the stolen funds.”

At the time of the theft, the stolen cryptocurrency was valued at around $70 million. When the couple was arrested, the bitcoin was worth more than $4.5 billion. Had Lichtenstein and his wife been able to keep the stolen bitcoin, it would be valued at $10.89 billion today.

“Lichtenstein, at times with Morgan’s assistance, employed numerous sophisticated laundering techniques, including using fictitious identities to set up online accounts; utilizing 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 legitimize Lichtenstein’s and Morgan’s banking activity; and exchanging a portion of the stolen funds into gold coins.”

Of the more than $4.5 billion in bitcoin (at the time of their arrest), $3.6 billion was recovered by the DOJ, the largest financial seizure in its history.

Lichtenstein and his wife Morgan both pleaded guilty to one count of conspiracy to commit money laundering in Aug. 2023. Following his imprisonment, Lichtenstein, who was born in Russia but grew up in the United States, will also serve three years of supervised release. His wife, Heather Morgan.

Morgan, who went by the alias Razzlekhan to promote her hip hop music and called herself “The Crocodile of Wall Street,” is scheduled to be sentenced on Nov. 18.

Lichtenstein expressed remorse for his cryptocurrency crimes and said he hopes to use his skills to fight cybercrime once he's out of prison, the BBC reported.

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