A major player in the 2016 Bitfinex hack, Ilya Lichtenstein, is heading to prison. He was sentenced to five years for his role in laundering a staggering $10.5 billion worth of Bitcoin.
The Great Bitcoin Heist and Laundering Scheme
Lichtenstein used some seriously advanced hacking skills to break into Bitfinex. He managed to steal almost 120,000 Bitcoin through over 2,000 fraudulent transactions. To cover his tracks, he deleted all evidence from Bitfinex’s system.
He didn’t do it alone. His wife, Heather Morgan, helped him launder the stolen money. Their scheme was incredibly complex, involving:
- Fake identities: They created tons of fake online accounts.
- Automated transactions: They used computer programs to automate the money movement.
- Darknet markets: They used these shady online marketplaces to move the funds.
- Cryptocurrency mixing: They used services to make the Bitcoin untraceable.
- Chain hopping: They converted Bitcoin into other cryptocurrencies to further obscure the money’s origins.
- Gold conversion: They even exchanged some Bitcoin for gold!
Both Lichtenstein and Morgan pleaded guilty to conspiracy to commit money laundering in August 2023. Morgan’s sentencing is coming up in November. Lichtenstein also faces three years of supervised release after his prison sentence.
Bitfinex Wins Big, Victims Still Need Help
The court ruled that Bitfinex is the main victim of the theft and is entitled to restitution. While the government acknowledges that many other people likely lost money, it’s having trouble tracking them all down. They’re setting up a special section on the Department of Justice website to help people submit claims for their losses.
Bitcoin’s Price Soars (But Then Dips)
At the time of writing, Bitcoin is trading at around $88,520. It’s seen a huge price increase recently, but has pulled back slightly from its recent all-time high.
