Ten billion dollar crypto theft lands hacker five years sentence

The first of two sentences related to the infamous hack of the Bitfinex crypto exchange in 2016 was announced yesterday, with the second expected next Monday.

The US District Court in Washington, DC, sentenced Ilya Lichtenstein, 35, to five years in prison. Last year, Lichtenstein and his wife, Heather Morgan, pleaded guilty to laundering bitcoin (BTC) stolen from Bitfinex.

Additionally, the hacker was ordered to serve three years of supervised release. Meanwhile, Morgan is scheduled to hear her sentence on November 18th.

The 119,754 stolen BTC were worth $72 million at the time of the theft but are valued at more than $10 billion today. Law enforcement seized most of the funds, 94,643 BTC, and they are expected to be returned to Bitfinex.

The US Attorney's Office for the District of Columbia claims that Lichtenstein hacked into Bitfinex’s network in 2016 and fraudulently authorized more than 2,000 transactions, sending BTC to his personal wallet.

Afterward, he covered his tracks by deleting access credentials and other log files from Bitfinex’s network. According to court documents, Morgan became involved at a later stage when her husband asked for help laundering the stolen funds.

Per the attorneys, while laundering the funds, the couple used fictitious identities to set up online accounts, utilized computer programs to automate transactions, deposited the stolen funds into accounts on various darknet markets and crypto exchanges, and then withdrew the funds.

They also converted BTC into other crypto assets and gold coins and attempted to obscure their transactions using so-called crypto asset mixing services, which help hide the origin of funds. Furthermore, the couple used US-based business accounts to legitimize their banking activity.

Reacting to Lichtenstein's sentence, social media users mostly criticized it as too lenient.

"Five years? That’s wild… lol slap on the wrist," user Timeisup posted on the X platform, while Rogue opined that the sentence was "low compared to what SBF got."

SBF, or Sam Bankman-Fried, founder of the collapsed crypto exchange FTX, was sentenced to 25 years in prison.

However, the main question in the industry remains: when will the seized funds be returned to Bitfinex?

"If the government doesn't give the property back, then they're just as guilty as this guy," another X user, Michael S., concluded.