Ilya Lichtenstein, the mastermind behind the largest cryptocurrency hack in history, faces a 5-year prison sentence after U.S. prosecutors urged a Washington district judge to impose the punishment.
Lichtenstein, along with his wife, Heather Morgan, admitted to laundering $6 billion worth of Bitcoin stolen during the 2016 hack of Bitfinex, a crypto exchange. The couple used advanced money-laundering techniques to obscure the origin of the stolen funds, including crypto mixers, darknet markets, and converting some of the funds into NFTs, gold, and even Walmart gift cards.
While Lichtenstein faces a 5-year sentence, court filings revealed that Morgan, also known as the rapper “Razzlekhan,” may serve just 18 months in prison followed by three years of supervised release. Morgan was charged for assisting her husband in laundering the funds, even after discovering his involvement in the hack in 2020. Although both pleaded guilty, prosecutors argued that Lichtenstein should face a harsher sentence as the primary orchestrator of the crime.
The Bitfinex hack is considered one of the most significant breaches in cryptocurrency history. The hackersstole 119,754 Bitcoins from the exchange, valued at $71 million at the time. Today, with Bitcoin’s price surge, that amount is now worth over $6 billion.
Meanwhile, the prosecutors requested a relatively short 5-year sentence for Lichtenstein due to his cooperation with authorities in other criminal investigations. Earlier this year, he testified in a trial involving Bitcoin Fog, a crypto mixer accused of aiding money laundering. Roman Sterlingov, Bitcoin Fog’s operator, faces up to 30 years in prison.
However, the federal prosecutors emphasized the importance of a strong sentence to deter future financial crimes, given the complexity and sophistication of Lichtenstein’s laundering methods.
Notably, Bitfinex’s native token, LEO, saw a significant price surge earlier this month after the U.S. government confirmed that Bitfinex is the sole entity eligible for compensation from the 2016 hack. According to CoinMarketCap, the token is currently trading at $6.09, a 1.06% decrease in value over the last 24 hours.
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