Ilya Lichtenstein, a 35-year-old from New York City, was sentenced to 60 months in federal prison on Nov. 14 for his role in a money laundering conspiracy involving the theft of approximately 120,000 bitcoin from Bitfinex, a global cryptocurrency exchange. The sentence was announced by Homeland Security Investigations (HSI) New York Special Agent in Charge William S.
Walker, alongside other officials from the Justice Department, IRS Criminal Investigation, and the FBI. According to the investigation and court documents, Lichtenstein hacked into Bitfinex’s network in 2016 using advanced tools and techniques. He fraudulently authorized more than 2,000 transactions, transferring 119,754 bitcoin to a cryptocurrency wallet under his control.
Lichtenstein then attempted to cover his tracks by deleting network access credentials and other log files that could have exposed his activities to law enforcement.
Sentenced for Bitfinex hack theft
After the hack, Lichtenstein enlisted the help of his wife, Heather Morgan, to launder the stolen funds.
The couple employed various sophisticated laundering techniques, including creating fictitious identities to set up online accounts, using computer programs to automate transactions, depositing the stolen funds into accounts at darknet markets and cryptocurrency exchanges before withdrawing them, converting bitcoin into other forms of cryptocurrency, and depositing a portion of the criminal proceeds into cryptocurrency mixing services. They also legitimized their activities by using U.S.-based business accounts and exchanging some of the stolen funds for gold coins. On Aug.
3, 2023, Lichtenstein and Morgan pleaded guilty to one count of conspiracy to commit money laundering. In addition to his prison term, Lichtenstein was ordered to serve three years of supervised release. The case was investigated by multiple agencies, including HSI New York Field Office, IRS-CI Washington D.C. Cyber Crimes Unit, FBI Chicago Field Office, and FBI Virtual Assets Unit, with assistance from the Justice Department’s Office of International Affairs and the Ansbach Police Department in Germany.
