Key Takeaways:
- Ilya Lichtenstein was sentenced to 5 years for laundering 120,000 stolen bitcoin from the 2016 Bitfinex hack.
- He and his wife, Heather Morgan, laundered 21% of the funds using sophisticated yet flawed tactics, including mixers and chain-hopping.
- Lichtenstein admitted to being the hacker, though neither he nor Morgan was charged for the Bitfinex breach itself.
Ilya Lichtenstein has been sentenced to five years in prison for laundering nearly 120,000 bitcoin stolen from Bitfinex in 2016, according to the U.S. Department of Justice.
Lichtenstein, 35, hacked Bitfinex using advanced techniques, executing over 2,000 unauthorized transactions to transfer 119,754 bitcoin to his wallet.
CRYPTO CROOK BUSTED: BITFINEX HACKER FACES 5 YRS IN THE SLAMMER
— Mario Nawfal’s Roundtable (@RoundtableSpace) October 16, 2024
Ilya "Dutch" Lichtenstein, the brain behind the $6B Bitfinex heist, just got wrecked.
Him and his wife, Heather Morgan a.k.a "Razzlekhan," tried to clean dirty crypto and failed.
Now the Feds want him to do 5… pic.twitter.com/bFGcD1QBtB
To cover his tracks, he deleted logs and credentials linking him to the breach.
After the hack, Lichtenstein and his wife, Heather Morgan—also known as rapper “Razzlekhan”—laundered 21% of the stolen funds (25,111 bitcoin) using sophisticated methods, including darknet markets, bitcoin mixers, Eastern European accounts, cryptocurrency exchanges, and “chain hopping.”
Some proceeds were converted into gold coins.
Despite the elaborate tactics, experts criticized Lichtenstein’s amateurish use of traceable Coinbase accounts.
Initially, authorities suspected the couple only of laundering, until Lichtenstein confessed to being the hacker.
They pleaded guilty to conspiracy to commit money laundering in August 2023.
While the charge carries a maximum 20-year sentence, Lichtenstein received five years and three years of supervised release.
Morgan faces sentencing on November 18, with prosecutors recommending an 18-month term.
The case, one of the most significant in cryptocurrency crime history, highlights the challenges of combating cyber laundering despite sophisticated tactics.
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