Bitfinex hacker receives five-year sentence for record-breaking crypto heist

The hacker behind one of the biggest-ever cryptocurrency heists will serve five years in prison for conspiring with his wife to launder billions in stolen Bitcoin. Ilya “Dutch” Lichtenstein was sentenced in Washington federal court Thursday after he admitted to hacking the Bitfinex crypto exchange in 2016 and stealing almost 120,000 Bitcoin tokens.

Lichtenstein and his wife Heather Morgan were arrested in 2022, and in August last year both pled guilty to conspiring to commit money laundering. The stolen cryptocurrency, worth around $71 million at the time of the theft, had soared in value to approximately $4.5 billion by the time Lichtenstein and Morgan were arrested. Valued at today’s prices, the stolen funds would be worth an even more staggering sum of over $10 billion.

According to the US Department of Justice, Lichtenstein and Morgan “employed numerous sophisticated laundering techniques” to hide the stolen funds, including using fictitious identities, converting the Bitcoin into other cryptocurrencies, buying gold, and depositing and withdrawing the proceeds at various darknet markets and cryptocurrency exchanges. 

Lichtenstein’s five-year sentence is notably lower than the maximum 20-year penalty for conspiracy to commit money laundering. Morgan, also known by her online rap persona “Razzlekhan,” is due to be sentenced on November 18th, and is expected to face 18 months in prison for her part in the heist.