30s Summary

Ilya Lichtenstein has been handed a five-year jail sentence for stealing 120,000 bitcoins from crypto exchange Bitfinex in 2016 and then laundering them. His wife, Heather Morgan, potentially faces 18 months of jail time, with her sentencing set for November 18. Despite using advanced laundering techniques, the pair were critiqued for their lack of experience and were only charged with money laundering, not the actual hack.

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Ilya Lichtenstein received a jail sentence of five years for stealing approximately 120,000 bitcoin from crypto exchange Bitfinex in 2016. Lichtenstein hacked Bitfinex’s network and transferred the stolen bitcoin into his personal wallet. He then deleted the access credentials and log files from the network to hide his tracks.

Following the heist, Lichtenstein, with the help of his wife, Heather Morgan, laundered the stolen bitcoin. Morgan, who also goes by her rapper name “Razzlekhan,” will have her sentencing on November 18. She could face up to 18 months in jail based on the prosecutors’ recommendation.

The pair utilized sophisticated money-laundering methods to clean 25,111 bitcoin, roughly 21% of the total amount stolen from Bitfinex. The methods they used were so complex that prosecutors described them as “the most complicated money laundering techniques [IRS agents] had seen to date.”

Despite the intricacy of their laundering schemes, ex-leader of cybercrime cartel Shadow Crew, Brett Johnson, pointed out that some of Lichtenstein’s methods were out of the ordinary and pointed to a lack of experience. “Ilya is a f***ing idiot. If you look at the way he was trying to launder money, he was doing absolutely everything wrong,” Johnson said.

Although Lichtenstein admitted to being the hacker behind the Bitfinex heist, he and his wife were only charged with money laundering, not for the hack itself. Lichtenstein pleaded guilty to one count of conspiracy to commit money laundering on August 3, 2023. He will also serve three years of supervised release after his jail sentence.