The new year started on a rather interesting note for Ilya Lichtenstein, the mastermind behind the 2016 Bitfinex hack that stole nearly 120,000 bitcoin. At the time of the hack, the stolen coins were worth $72 million, but their value has since surpassed $10 billion due to Bitcoin’s surge in price.
Lichtenstein was released from prison early today and publicly expressed gratitude to President Trump for the First Step Act, which enabled his early release through good-time credits.
The 2016 Hack History
On August 2, 2016, the Hong Kong exchange Bitfinex was hacked. The attackers exploited vulnerabilities in the exchange’s wallet system and stole 119,756 BTC, which was valued at approximately $72 million at the time. The theft caused a significant drop in Bitcoin’s price.
Later, Lichtenstein admitted to orchestrating the attack. He utilized advanced techniques to infiltrate the network and falsely authorized over 2,000 transactions. He transferred the stolen funds to a wallet that he controlled and deleted logs to cover his tracks. His wife, Heather Morgan, assisted him in laundering the money.
However, investigators traced the movements on the blockchain, leading to the couple’s arrest in New York in February 2022. Authorities seized more than 94,000 bitcoin, then valued at $3.6 billion. Additional recoveries continued through 2025, making this the most significant financial seizure ever conducted by the Department of Justice (DOJ).
Ilya Lichtenstein Released from Prison
Lichtenstein was sentenced to five years in prison in November 2024, and his wife received 18 months for money laundering. Their cooperation with authorities led to reduced penalties, and their sentences include supervised release. Morgan was released in late 2025 for good behavior and publicly thanked Trump in a video.
Officials clarified that her release was based solely on her conduct, not any direct intervention. Lichtenstein was released today, citing the First Step Act, which allows non-violent offenders to earn credits through rehabilitation programs. However, there is no evidence that Lichtenstein received a pardon.
Following his release, Lichtenstein expressed explicit gratitude and pledged to contribute positively to cybersecurity.
“Thanks to President Trump’s First Step Act, I have been released from prison early. I remain committed to making a positive impact in cybersecurity as soon as I can. To the supporters, thank you for everything. To the haters, I look forward to proving you wrong,” he said.
Meanwhile, a January 2025 ruling required that the recovered Bitcoin be sent to Bitfinex, excluding it from the U.S. Strategic Bitcoin Reserve. The Department of Justice (DOJ) has also pushed for restitution under federal law.
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