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For his role, Lichtenstein was sentenced to five years in prison, followed by three years of supervised release.
Key Notes
The man behind the hack of Bitfinex hack has been sentenced to years in prison, drawing the curtain in one of the largest crypto heists in history.The stolen bitcoin, originally valued at $72 million are worth billions today.Ilya Lichtenstein, a hacker responsible for one of the most significant crypto heists in history, was sentenced to five years in prison on November 14 for laundering the proceeds of his 2016 attack on Bitfinex, one of the prominent crypto exchanges in the industry.
The operation siphoned off nearly 120,000 Bitcoin BTC $89 306 24h volatility: 1.8% Market cap: $1.77 T Vol. 24h: $91.14 B valued at $70 million at the time but now worth an astonishing $10.5 billion due to the dramatic rise in the price of the leading crypto asset.
The 2016 Heist: How It Happened
In August 2016, Lichtenstein, who is now 35, exploited vulnerabilities in Bitfinex’s systems using sophisticated hacking tools and techniques. Once inside, he authorized more than 2,000 fraudulent transactions, transferring 119,754 BTC to a wallet under his control.
After the incident, he deleted critical credentials and log files from Bitfinex’s network to cover his tracks, making it difficult for law enforcement to nail him down.
Lichtenstein did not act alone. After the hack, he enlisted the help of his wife, Heather Morgan, to launder the stolen funds. Together, they deployed an array of techniques to conceal the trail of the illicit bitcoin. This included using fake identities to set up online accounts, automating transactions with specialized software, and moving funds through various darknet markets and crypto exchanges. They also engaged in “chain hopping”, a process of converting bitcoin into other cryptocurrencies to make the funds harder to trace.
The couple further masked their activities by funneling proceeds into crypto mixing services and depositing some funds into the US-based business accounts to lend legitimacy to their banking activities. Lichtenstein even converted part of the stolen bitcoins into gold coins.
Legal Consequences
In February 2022, the couple was arrested in Manhattan and faced charges of conspiring to commit money laundering and defraud the United States. On August 3, 2023, Lichtenstein and Morgan both pleaded guilty to a single count of conspiracy to commit money laundering.
For his role, Lichtenstein was sentenced to five years in prison, followed by three years of supervised release. His partner, Morgan has been scheduled for sentencing this month on November 18.
The case was investigated by multiple agencies, including the IRS Criminal Investigation (IRS-CI) Washington D.C. Cyber Crimes Unit, the FBI’s Chicago Field Office, the FBI Virtual Assets Unit, and Homeland Security Investigations (HSI) New York Field Office.
These efforts were supported by the Justice Department’s Office of International Affairs and Germany’s Ansbach Police Department.
The sentencing of Lichtenstein marks a significant moment in the ongoing battle against cybercrime and crypto-related offenses. According to Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division, the case “demonstrates the Department’s commitment to pursuing justice for victims of cybercrime and holding perpetrators accountable”.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
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Chimamanda is a crypto enthusiast and experienced writer focusing on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love for travel and food, bringing a fresh and engaging perspective to her work.
