Key Takeaways:
Ilya Lichtenstein, a hacker responsible for stealing 120,000 BTC, has been sentenced to five years in the U.S. for laundering the proceeds of one of the largest cryptocurrency thefts in history.
Ilya Lichtenstein Pleads Guilty To Stealing 120,000 BTC From Bitfinex Exchange
The hacker pleaded guilty last year in the case involving the Bitfinex cryptocurrency exchange, which suffered a hack in 2016 that resulted in the theft of Bitcoins worth $10.7 billion at the current market rate.
As per a statement from the Department of Justice, Lichtenstein and his wife Heather Morgan pleaded guilty to one count of conspiracy to commit money laundering for the Bitcoins they stole from Bitfinex. Morgan is a rapper who goes by the alias “Rizzlekhan”.
At the time of the hack, the Bitcoins were worth around $70 million, but their value had risen to $4.5 billion by the time the couple was arrested.
The Department of Justice (DoJ) said in its statement that Lichtenstein used advanced hacking tools and techniques to break into Bitfinex’s network and fraudulently authorized more than 2,000 transactions that transferred out 119,754 BTC from the exchange to a crypto wallet under his control.
Lichtenstein took several steps to hide his tracks from law enforcement by destroying his Bitfinex network access credentials and other log files. Following the hack, Lichtenstein sought help from Morgan to launder the stolen Bitcoins. In the months that followed, the couple employed numerous sophisticated methods, including fictitious identities, swapping the BTC for different cryptocurrencies, and buying gold coins.
The Russia-born US resident would then meet couriers while on family trips to Kazakhstan and Ukraine, and move the laundered through them to his bank account in the States. Heather “Rizzlekhan” Morgan went viral on social media when the case first emerged after posting expletive music videos and rap songs where she called herself a “bad-ass money maker” and “crocodile of the Wall Street.
In an interview with Forbes, she claimed to be a successful tech businesswoman, an economist, a serial entrepreneur, a software investor, and a rapper.
Bitfinex Hacker Expresses Remorse For His Actions
Lichtenstein was arrested in February 2022 and has already spent two years and nine months in jail. Following the verdict, the 35-year-old expressed remorse for wasting his talents on crime instead of contributing positively to the community, before adding his wishes to apply his expertise to fight cybercrime in the future.
The judge preceding the case is scheduled to sentence Morgan on Monday, for whom prosecutors have recommended an 18-month sentence. Lichtenstein pleaded with the judge to spare his wife from prison, placing blame on himself for including her in the money laundering scheme.
According to the prosecutors, Lichtenstein only revealed to his wife about the hack over three years after it happened, but he solicited her help from the beginning to launder the proceeds without explaining where it came from.
The couple managed to launder 21% of the Bitcoins that were stolen from Bitfinex, which was worth around $14 million at that time. The same amount would have been worth over $1 billion at the time of their arrest nearly three years ago. Authorities were able to recover the remaining funds, which are collectively worth around $6 billion at current prices.
Prosecutors declared Lichtenstein as one of the greatest money launders the government has encountered in the crypto space. Despite the severity of his crimes, he was cooperative with authorities and also helped them investigate other cybercrime.
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