Five-Year Prison Sentence for Man who Stole 120,000 Bitcoin from Bitfinex in 2016

More than 120,000 bitcoin were stolen in a 2016 breach of Bitfinex. Seven years later the perpetrator pleaded guilty.

And Thursday he was sentenced to a five-year prison term, reports the Associated Press:

Ilya Lichtenstein masterminded one of the largest-ever thefts from a virtual currency exchange before he and his wife, Heather Rhiannon Morgan, carried out an elaborate scheme to liquidate the stolen funds, according to federal prosecutors... 'Over half a decade, the defendant engaged in what IRS agents described as the most complicated money laundering techniques they had seen to date,' prosecutors wrote... The couple successfully laundered about 21 percent of the funds stolen from Bitfinex. The laundered money was worth at least $14 million at 2016 prices. Its value would have exceeded $1 billion at the time of their 2022 arrest.

Authorities seized the remaining funds, collectively valued at over $6 billion at current prices... An attorney for Bitfinex said the hack 'devastated' its finances and its reputation with its customers, with the stolen funds accounting for approximately 36% of the company's assets at the time of theft. 'Bitfinex had to take unprecedented and immediate action to ensure that any losses from the Hack would ultimately be borne by Bitfinex and its shareholders alone, not its customers,' the lawyer, Barry Berke, wrote in a letter to the judge.

A prosecutor said Lichtenstein immediately began cooperating with federal authorities after his arrest, helping them with other cybercrime investigations. Over 96% of the stolen funds have been recovered, with help from Lichtenstein, according to defense attorney Samson Enzer. The 'vast bulk' of the stolen money was never spent, the lawyer said.

Lichtenstein also 'pleaded with the judge to spare his wife from prison, blaming himself for her involvement,' according to the article. His wife — a rap artist who records under the name Razzlekhan — will be sentenced Monday, but has pleaded guilty to the same charge, and prosecutors are recommending an 18-month sentence.

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