Ilya Lichtenstein, who pleaded guilty was sentenced to five years in prison for hacking the Bitfinex cryptocurrency exchange in 2016, the US Department of Justice announced on Thursday.
Liechtenstein that is charged for him attraction in a money laundering scheme this led to the theft of nearly 120,000 bitcoins (valued at over $10.5 billion at current prices) from the crypto exchange. Heather Rhiannon Morgan, his wife, also pleaded guilty to the same offenses last year. They both were arrested in February 2022 Morgan is scheduled to be sentenced on November 18.
“The 35-year-old Lichtenstein hacked the Bitfinex network in 2016 using advanced hacking tools and techniques,” the Justice Department said. said in a statement to the press. “Once in the network, Lichtenstein fraudulently authorized more than 2,000 transactions, transferring 119,754 bitcoins from Bitfinex to a cryptocurrency wallet controlled by Lichtenstein.”
In addition to taking a number of steps to cover their tracks by deleting access credentials and other log files from the Bitfinex network, the pair are said to have used fake identities to create online bank accounts to launder the proceeds, deposit them into Darknet and cryptocurrency markets. exchanges.
The funds were eventually withdrawn, converted to other cryptocurrencies (a technique called chain hopping), depositing some of the ill-gotten assets into mixing services such as Bitcoin Fog, converting it to fiat currency and transferring it to a US bank account, and exchanging some crypto to gold coins.
The development comes days after Roman Sterlingov, the 36-year-old founder of Bitcoin Fog awarded up to 12 years and six months of imprisonment for facilitating money laundering between 2011 and 2021. Earlier this year, Liechtenstein was testified in court that he used Bitcoin Fog 10 times to launder virtual assets.
Blockchain analytics company Chainalysis previously revealed how the couple’s purchase of Walmart gift cards using stolen bitcoins on an unnamed virtual currency exchange ultimately proved to be their undoing after it was discovered that the gift cards were redeemed using the retail giant’s iPhone app under account in the name of Heather Morgan.
“This allowed agents to obtain search warrants for Lichtenstein and Morgan’s home and cloud storage, where they found files containing details of the cryptocurrency addresses used to move the stolen funds — including their private keys — along with false information that used to open accounts. on cryptocurrency exchanges and plans to purchase fake passports,” Chainalysis said.
“This discovery allowed investigators to trace the entire flow of funds.”
According to Associated PressMorgan is a business owner and writer. She also adopted an alter ego Razzlekhan perform rap songs and record videos for your music. At the time of the break-in, the couple lived in San Francisco.
“Lichtenstein orchestrated and orchestrated the Bitfinex hack without informing (Morgan),” prosecutors said. “He also initially asked the accused for help without explaining what exactly he was doing. The accused was certainly a willing participant and bears full responsibility for his actions, but she was a lower-level participant.’
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The sentence also came after Darren Lee, 41, pleaded guilty to participating in a criminal scheme to launder $73.6 million stolen through cryptocurrency investment scams using a network of shell companies and international bank accounts. Lee was arrested back in April 2024 in Atlanta. He is expected to be sentenced next March.
“Lee admitted to conspiring with others to launder funds obtained from victims through cryptocurrency and related fraud,” Department of Justice. said. “In furtherance of the conspiracy, he communicated with his associates through encrypted messaging services.”
“In order to conceal or disguise the nature, location, source, ownership, and control of the victim’s fraudulently obtained funds, Lee instructed the conspirators to open U.S. bank accounts opened in the name of the shell companies and supervised the receipt and execution of the funds. interstate and international electronic transfers of victims’ funds.
The funds were then transferred to financial accounts under their control, after which they were converted into virtual currency such as Tether and distributed to wallets owned by Lee and his associates. Lee faces a maximum sentence of 20 years in prison.
“Financial criminals and money launderers who allow them to do untold harm while destroying lives,” said U.S. Attorney Martin Estrada for the Central District of California. “Investors should be careful and be on the lookout for anyone offering to get rich quick through new, exotic investments. A healthy dose of skepticism can prevent financial collapse down the road.”
