Bitfinex Hacker Faces Jail Time for Major Bitcoin Heist

In a notable case from a 2016 Bitfinex hack, Ilya Lichtenstein, who is accused of stealing 120,000 Bitcoin, is expected to receive a recommended five-year prison sentence, according to U.S. prosecutors.

The Case Overview

In a court filing dated October 15, prosecutors filed a request with a federal court in Washington, D.C., advocating for a reduced sentence for Lichtenstein following his guilty plea to a single count of conspiracy to commit money laundering.

Arguments for a Reduced Sentence

Prosecutors are suggesting that Lichtenstein merits a lighter sentence due to several factors:

• No previous criminal record.
• Provided significant assistance that has aided multiple investigations.

Details Surrounding the Case

Prosecutors noted that although Lichtenstein laundered approximately 25,111 Bitcoin from the stolen total—valued at $71 million at that time—the attempts to erase incriminating digital evidence did not substantially impede the ongoing investigation. They believe a longer sentence is warranted, particularly as Lichtenstein devised the elaborate plan and engaged in various forms of financial fraud, including a separate theft of $200,000 from another cryptocurrency exchange.

The Impact on Victims

Authorities argue that the rise of young cybercriminals can diminish the perceived severity of such crimes, suggesting that a strong sentence is crucial to deter future offenses and reflect the crime’s seriousness. They pointed out that while the defendants aided law enforcement in recovering some stolen funds, it was primarily the intervention of authorities—rather than an expression of remorse—that enabled these recoveries.

Restitution and Sentencing Schedule

Prosecutors are also calling for both Lichtenstein and his wife, Heather Morgan, to return the seized crypto assets to Bitfinex. This includes about 95,000 Bitcoin, along with significant amounts of Bitcoin Cash, Bitcoin Satoshi Vision, and Bitcoin Gold, totaling a value exceeding $6 billion.

Lichtenstein’s sentencing is set for November 14, with Morgan’s sentencing scheduled for the following day, November 15.