Bitfinex hacker should get 5 years jail for 120K BTC heist: Feds

As a seasoned crypto investor with over a decade of experience navigating the digital asset landscape, I find myself deeply troubled by the proposed sentence for Ilya Lichtenstein. While it is essential that justice be served and cybercriminals are held accountable for their actions, a five-year prison term seems excessive, especially considering his lack of prior criminal history and significant cooperation with authorities.


US authorities are urging that the individual who confessed to stealing 120,000 Bitcoins from the cryptocurrency exchange Bitfinex in 2016 be imprisoned for a period of five years.

On October 15th, prosecutors petitioned a federal court in Washington D.C. to grant Ilya Lichtenstein a sentence shorter than the 20 years he would typically receive following his guilty plea for conspiring to launder money.

In their opinion, a less severe sentence should be imposed since he lacks any past criminal record and provided significant help that positively impacted multiple ongoing investigations.

Bitfinex hacker should get 5 years jail for 120K BTC heist: Feds

Previously this month, legal authorities petitioned the court to lessen the prison term for Heather Morgan, who is both an associate and spouse of Lichtenstein, to a 18-month sentence for her part in laundering the embezzled cryptocurrency, based on her willingness to collaborate.

According to the memo penned by prosecutors, they argue that Lichtenstein should receive a less severe penalty because he laundered approximately 25,111 Bitcoins out of a total potential amount of 120,000. This equates to around $71 million at the time, and his efforts to erase damaging evidence were unsuccessful in impeding the investigation.

Nevertheless, they proposed a more extended incarceration than what Morgan received, given that Lichtenstein took months to plan his scheme and also tested out additional hacking and financial deceit while stealing $200,000 from another cryptocurrency exchange.

The manner in which he acts signifies a fresh trend among young internet criminals. Minimizing their digital activities could potentially undervalue the pain experienced by victims, and a more forceful statement is crucial for deterring future wrongdoings and emphasizing the gravity of the offense, as argued by prosecutors.

Although the defendants did help in retrieving the remaining stolen money after their apprehension, it was the actions taken by law enforcement, rather than a sudden change of heart from the defendants, that allowed for these recoveries to happen,” they explained further.

It’s important that the defendant is found responsible for the entirety of his intricate and far-reaching money laundering scheme.

The prosecution is asking the judge to make an order compelling both defendants to restore the cryptocurrency assets that were confiscated by the authorities from a Lichtenstein wallet, as a form of compensating Bitfinex directly with these same assets.

This digital wallet holds approximately 95,000 Bitcoins, along with 117,400 each of Bitcoin Cash, Bitcoin Satoshi Vision, and Bitcoin Gold. The total value of these cryptocurrencies exceeds six billion dollars at the current market prices.

At first, it was believed that Lichtenstein and Morgan merely cleaned the profits from the hack, but later on, Lichtenstein himself confessed to being the hacker as well.

Lichtenstein’s sentencing is scheduled for Nov. 14, while his wife will be sentenced on Nov. 15.

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2024-10-17 09:19