US Prosecutors Request 5-Year Sentence for Bitfinex Hacker

The United States prosecutors have requested that Ilya Lichtenstein, the mastermind behind the $6 billion hack of the crypto exchange Bitfinex, be sentenced to five years in prison.

The 2016 Bitfinex hack remains one of the largest in cryptocurrency history. Lichtenstein used his skills in cybercrime to steal the funds, and his wife, Heather Morgan, a rapper also known as “Razzlekhan,” helped him launder the money.

According to court documents, the couple laundered many funds stolen from Bitfinex using various techniques, including complex transaction layering, darknet markets, and cryptocurrency mixers.

5-Year Prison Sentence for Lichtenstein

The couple were arrested in Manhattan in February 2022 and charged with conspiring to launder nearly 120,000 bitcoins stolen during the hack. Lichtenstein pleaded guilty to the crime last year.

The prosecutors are not seeking the maximum sentence for Lichtenstein but a lower sentence of five years. This is due to his cooperation in the case and assistance in other investigations beyond his own. Earlier this year, he testified on behalf of the government in a money-laundering trial involving a mixing service called Bitcoin Fog.

As part of his guilty plea, Lichtenstein has agreed to forfeit all the proceeds of his crime.

Despite his assistance, prosecutors are pushing for a strong sentence for Lichtenstein, arguing that it would help break the cycle of young cybercriminals.

“Unfortunately, the defendant fits the profile of many cyber criminal defendants that the government has encountered. Many of these individuals start out as young men who develop impressive technical expertise from an early age. As teens, they feel socially isolated and seek out community online. They are exposed to criminal activity in those online spaces, and the activity is normalized in a way that trivializes the impact on the victims,” prosecutors stated.

Partner Faces Lower Sentence

Compared to his wife, Lichtenstein would serve significantly more time behind bars as he was primarily responsible for the Bitfinex hack.

Last week, prosecutors suggested that Morgan serve only 18 months behind bars. According to court documents, she was unaware of her husband’s theft until 2020, when he enlisted her help to launder the fund.

She also provided substantial assistance in the case. The couple are set to receive their sentence in November.