Ilya Lichtenstein, who pleaded guilty to his role in the 2016 Bitcoin hack of cryptocurrency exchange Bitfinex, has been sentenced to five years in prison, the US Department of Justice (DOJ) announced on Thursday.
Liechtenstein was sentenced for his involvement in a money laundering conspiracy to steal approximately 120,000 bitcoins from an exchange.
The couple’s Bitcoin hacking and laundering operation was revealed
Court documents It reveals that Liechtenstein used “advanced hacking tools and techniques” to hack the Bitfinex network. Once inside, he fraudulently authorized more than 2,000 transactions, transferring 119,754 bitcoins to a cryptocurrency wallet he controlled.
To avoid detection, Liechtenstein took measures to cover his tracks by deleting access credentials and log files from the Bitfinex network that could have exposed his activities to law enforcement. After the hack, he enlisted the help of his wife, Heather Morgan, to launder the stolen money.
The Ministry of Justice revealed that Laundry chart The work used by Lichtenstein and Morgan was “particularly sophisticated”. They used fake identities to create online accounts, conduct automated transactions using computer software, and deposit stolen funds into various accounts linked to dark web markets and cryptocurrency exchanges.
The pair also engaged in “chain hopping,” a practice in which Bitcoin is converted into other cryptocurrencies to hide its origin. In addition, they used cryptocurrency Mixing services To further hide the illicit funds and even exchange some of the stolen bitcoins for gold coins.
On August 3, 2023, Lichtenstein and Morgan each pleaded guilty to one count of conspiracy to commit money laundering. In addition to the prison sentence, Lichtenstein was ordered to serve three years of supervised release. Morgan is scheduled to be sentenced on November 18.
Bitfinex declared the main victim in BTC theft
Most recently, the U.S. District Court for the District of Columbia It ruled in favor of BitfinexConfirming that the exchange is the only entity entitled to recover the approximately 120,000 bitcoins stolen in the hack eight years ago.
This prompted a legal victory United States Government To acknowledge Bitfinex as the primary victim of the incident while acknowledging that “multiple individuals and groups” may have been affected by the theft.
Despite this recognition, the government faces challenges in identifying all affected account holders. To address this problem, plans are underway to utilize the Department of Justice’s website dedicated to “big cases.”
The new website will reportedly provide “essential notifications” and offer a streamlined process for individuals to file their claims Financial losses.
While the government does not classify these individual account holders as “victims” under current legal definitions, it aims to give them a platform to assert their claims using alternative notification methods.
At the time of writing, the largest cryptocurrency on the market, Bitcoin, is trading at $88,520, an increase of 16% each week, although in the last 48 hours it has fallen from its original price. Highest level ever $93,250 was struck on Wednesday.
Featured image of DALL-E, chart from TradingView.com