Hackers Behind Bitfinex Breach Face Justice
Ilya Lichtenstein Sentenced to 5 Years for 2016 Crypto Hack
The U.S. Department of Justice (DoJ) announced that Ilya Lichtenstein has been sentenced to five years in prison for his role in the 2016 hacking of the cryptocurrency exchange Bitfinex. Lichtenstein admitted to the crime, where about 120,000 bitcoins—currently worth over $10.5 billion—were stolen.
His wife, Heather Morgan, also pled guilty to charges related to the same incident last year. The pair was arrested in February 2022, and Morgan is set to receive her sentencing on November 18.
How the Bitfinex Hack Unfolded
According to the DoJ, 35-year-old Lichtenstein used advanced hacking tools to breach Bitfinex’s systems in 2016. He authorized over 2,000 fake transactions, transferring almost 120,000 bitcoins into his personal wallets.
To cover their tracks, the couple allegedly used fake IDs to open accounts, sent the stolen funds through darknet marketplaces, and deleted evidence like log files and access credentials.
The stolen funds were converted into other cryptocurrencies, laundered through platforms like Bitcoin Fog, exchanged for gold coins, and even transferred to U.S. bank accounts.
Chainalysis Helped Crack the Case
The blockchain analytics firm Chainalysis played a key role in exposing the duo. Investigators discovered they used stolen bitcoins to buy Walmart gift cards, which were linked to Heather Morgan’s account on the retailer’s mobile app.
With this evidence, agents secured a search warrant for the couple’s home and cloud storage. Inside, they found documents containing private keys to stolen cryptocurrency, fake account details, and plans to obtain forged passports.
A Tangled Web of Deception
Heather Morgan, who also performed as a rapper under the name Razzlekhan, initially had no idea about her husband’s scheme, according to prosecutors. However, she later became a willing participant in the plot, making her accountable for her actions.
Other Financial Crimes: Pig Butchering Scam
Chinese National Faces 20 Years in Prison
In another case, 41-year-old Daren Li pled guilty to running a money-laundering operation connected to bitcoin investment scams. Li and his co-conspirators stole over $73.6 million by setting up fake businesses and foreign accounts to move stolen funds.
Li reportedly used encrypted messaging to coordinate with his partners and directed them to open U.S. bank accounts under fake company names. Once victim funds were deposited, the money was converted to virtual currencies like Tether and moved into wallets under their control.
Li was arrested in Atlanta in April 2024 and faces up to 20 years in prison when sentenced next March.
Authorities Warn of Crypto Investment Scams
U.S. Attorney Martin Estrada urged the public to remain cautious about offers promising quick returns through unusual investments. “Scammers and their money launderers cause devastating financial losses,” he said. “Stay skeptical and think twice before trusting risky opportunities.”