J
Joshua Fagbemi
Guest
A Bitcoin thief, Ilya Lichtenstein has been sentenced to five years imprisonment over the 2016 hack on Bitfinex‘s cryptocurrency exchange. Tagged as the largest cryptocurrency theft in history, Liechtenstein laundered 120,000 BTC, worth $10.7 billion at the current market price. The bitcoin was worth about $70 million in 2016 and $4.5 billion when Lichtenstein was arrested in 2022.
After the hack, Lichtenstein, with the help of his wife, manipulated the laundering by using numerous methods, including swapping BTC for different cryptocurrencies, identity forgeries, and purchasing gold coins.
According to the statement from the US Department of Justice (DoJ), Lichtenstein and his wife Heather Morgan pleaded guilty to the count of committing money laundering against Bitfinex. Morgan is a rapper who goes by the alias “Rizzlekhan”.
Ilya Lichtenstein and his wife, Heather Morgan
The agency highlighted that the accused employed advanced hacking techniques on Bitfinex’s network. He fraudulently wired more than 2,000 transactions worth 119,754 BTC from the Bitfinex exchange into his private crypto wallet. Lichtenstein made a couple of moves to cover his tracks from the US prosecutors by destroying his Bitfinex network access credentials and other related files.
The judge preceding the case is scheduled to sentence Morgan in a few days to come where prosecutors have recommended an 18-month sentence. Lichtenstein pleaded with the judge to spare his wife from prison, placing blame on himself for including her in the money laundering scheme.
The 35-year-old took full responsibility for his actions and pleaded with the court to spare his wife from jail. He noted that the hack was revealed to his wife 3 years after it happened but got help from her in transferring the proceeds.
Authorities also claimed that Lichtenstein was fully cooperative with the investigation and also helped them in uncovering other cybercrime cases.
In August 2016, the Bitfinex cryptocurrency exchange, based in Hong Kong, announced it had suffered a security breach. Around 2,000 approved transactions were sent to a single wallet from users’ segregated wallets. Immediately thereafter, Bitcoin’s trading price plunged by 20%, causing the value of the stolen Bitcoin to dip to $58 million. After learning of the breach, Bitfinex halted all Bitcoin withdrawals and trading and said it was tracking down the perpetrators of the hack.
The US government recovered and seized a portion of the stolen bitcoin in February 2022, by decrypting a file owned by Ilya Lichtenstein that contained addresses and private keys associated with the stolen funds. Lichtenstein and his wife, Heather R. Morgan were charged with conspiracy to launder the stolen bitcoin. Both admitted to committing the theft in August 2023 and pleaded guilty to money laundering.
Following the verdict, the 35-year-old expressed remorse for wasting his talents on crime instead of contributing positively to the community. He then added his interest in applying his expertise to fight cybercrime in the future.
The couple managed to launder 21% of the Bitcoins that were stolen from Bitfinex, which was worth around $14 million at that time. The same amount would have been worth over $1 billion at the time of their arrest nearly three years ago. Authorities were able to recover the remaining funds, which are collectively worth around $6 billion at current prices.
According to the US authorities, Lichtenstein met couriers while on family trips to Kazakhstan and Ukraine and moved the money laundered through them to his bank account in the States.
Heather “Rizzlekhan” Morgan went viral on social media when the case first emerged after posting expletive music videos and rap songs where she called herself a “bad-ass money maker” and “crocodile of the Wall Street. In an interview with Forbes, she claimed to be a successful tech businesswoman, an economist, a serial entrepreneur, a software investor, and a rapper.
Prosecutors declared Lichtenstein as one of the greatest money launders the government has encountered in the crypto space.
Also Read: 500 Nigerian languages will be dead in 50 years if they are not AI compliant- linguistics prof.
After the hack, Lichtenstein, with the help of his wife, manipulated the laundering by using numerous methods, including swapping BTC for different cryptocurrencies, identity forgeries, and purchasing gold coins.
According to the statement from the US Department of Justice (DoJ), Lichtenstein and his wife Heather Morgan pleaded guilty to the count of committing money laundering against Bitfinex. Morgan is a rapper who goes by the alias “Rizzlekhan”.
Ilya Lichtenstein and his wife, Heather Morgan
The agency highlighted that the accused employed advanced hacking techniques on Bitfinex’s network. He fraudulently wired more than 2,000 transactions worth 119,754 BTC from the Bitfinex exchange into his private crypto wallet. Lichtenstein made a couple of moves to cover his tracks from the US prosecutors by destroying his Bitfinex network access credentials and other related files.
The judge preceding the case is scheduled to sentence Morgan in a few days to come where prosecutors have recommended an 18-month sentence. Lichtenstein pleaded with the judge to spare his wife from prison, placing blame on himself for including her in the money laundering scheme.
The 35-year-old took full responsibility for his actions and pleaded with the court to spare his wife from jail. He noted that the hack was revealed to his wife 3 years after it happened but got help from her in transferring the proceeds.
Authorities also claimed that Lichtenstein was fully cooperative with the investigation and also helped them in uncovering other cybercrime cases.
Lichtenstein – The brain behind the largest Bitcoin theft in history
In August 2016, the Bitfinex cryptocurrency exchange, based in Hong Kong, announced it had suffered a security breach. Around 2,000 approved transactions were sent to a single wallet from users’ segregated wallets. Immediately thereafter, Bitcoin’s trading price plunged by 20%, causing the value of the stolen Bitcoin to dip to $58 million. After learning of the breach, Bitfinex halted all Bitcoin withdrawals and trading and said it was tracking down the perpetrators of the hack.
The US government recovered and seized a portion of the stolen bitcoin in February 2022, by decrypting a file owned by Ilya Lichtenstein that contained addresses and private keys associated with the stolen funds. Lichtenstein and his wife, Heather R. Morgan were charged with conspiracy to launder the stolen bitcoin. Both admitted to committing the theft in August 2023 and pleaded guilty to money laundering.
Following the verdict, the 35-year-old expressed remorse for wasting his talents on crime instead of contributing positively to the community. He then added his interest in applying his expertise to fight cybercrime in the future.
The couple managed to launder 21% of the Bitcoins that were stolen from Bitfinex, which was worth around $14 million at that time. The same amount would have been worth over $1 billion at the time of their arrest nearly three years ago. Authorities were able to recover the remaining funds, which are collectively worth around $6 billion at current prices.
According to the US authorities, Lichtenstein met couriers while on family trips to Kazakhstan and Ukraine and moved the money laundered through them to his bank account in the States.
Heather “Rizzlekhan” Morgan went viral on social media when the case first emerged after posting expletive music videos and rap songs where she called herself a “bad-ass money maker” and “crocodile of the Wall Street. In an interview with Forbes, she claimed to be a successful tech businesswoman, an economist, a serial entrepreneur, a software investor, and a rapper.
Prosecutors declared Lichtenstein as one of the greatest money launders the government has encountered in the crypto space.
Also Read: 500 Nigerian languages will be dead in 50 years if they are not AI compliant- linguistics prof.