Current:Home > MarketsMan who stole and laundered roughly $1B in bitcoin is sentenced to 5 years in prison -Blueprint Money Mastery
Man who stole and laundered roughly $1B in bitcoin is sentenced to 5 years in prison
Poinbank View
Date:2025-04-06 16:20:26
WASHINGTON (AP) — A computer expert who stole bitcoin worth billions of dollars at current prices — and then spent years laundering some of the hacked cryptocurrency with help from his wife — was sentenced on Thursday to five years in prison.
Ilya Lichtenstein masterminded one of the largest-ever thefts from a virtual currency exchange before he and his wife, Heather Rhiannon Morgan, carried out an elaborate scheme to liquidate the stolen funds, according to federal prosecutors.
U.S. District Judge Colleen Kollar-Kotelly told Lichtenstein that his theft was “meticulously planned” and not an impulsive act.
“It’s important to send a message that you can’t commit these crimes with impunity, that there are consequences to them,” she said.
Lichtenstein, who gets credit for the two years and nine months that he has spent in jail since his February 2022 arrest, expressed remorse for “wasting my talents on crime instead of a positive contribution to society.” He said he hopes that he can apply his expertise to fight cybercrime when he gets out of prison.
“I want to take full responsibility for my actions and make amends any way I can,” he said.
The judge is scheduled to sentence Morgan on Monday. Lichtenstein pleaded with the judge to spare his wife from prison, blaming himself for her involvement.
What to know about Trump’s second term:
High food prices: Americans are fed up with the price of food, and many are looking to President-elect Donald Trump to lower their grocery bills. But many economists think Trump’s plans could make food prices rise.
- Staffing the administration: Here are the people Trump has picked for key positions so far. Plus, a look at recess appointments and how could Trump use them to fill his Cabinet.
Follow all of our coverage as Donald Trump assembles his second administration.
In August 2016, Lichtenstein hacked into a virtual currency exchange, Hong Kong-based Bitfinex, and stole approximately 120,000 bitcoin. It was worth approximately $71 million at the time of the hack and would be valued at more than $7.6 billion at current market prices, according to prosecutors.
Several months later, Lichtenstein began moving the stolen bitcoin in a string of complex transactions designed to conceal its path across a series of accounts and platforms. He enlisted his wife’s help in cleaning the stolen funds.
Lichtenstein, an entrepreneur and cryptocurrency investor, is a U.S. citizen who was born in Russia and grew up in a Chicago suburb. Morgan, a business owner and writer, adopted the alter ego “ Razzlekhan ” for performing rap songs and recording videos for her music.
Lichtenstein and Morgan were living in New York City when they were arrested in February 2022. They had been living in San Francisco around the time of the hack.
Prosecutors recommended a five-year prison sentence for Lichtenstein, who pleaded guilty in August 2023 to one count of money laundering conspiracy. They recommended an 18-month prison sentence for Morgan, who pleaded guilty to the same charge.
“Neither the hack nor the laundering scheme was an impulsive decision. The defendant (Lichtenstein) spent months attempting to gain access to Bitfinex’s infrastructure and get the accesses and permissions he needed in order to orchestrate his hack,” prosecutors wrote.
Lichtenstein told his wife about the hack over three years later, but he initially solicited her help in laundering the proceeds “without explaining exactly what he was doing,” according to prosecutors.
Morgan “was certainly a willing participant and bears full responsibility for her actions, but she was a lower-level participant,” prosecutors wrote.
During family trips to Kazakhstan and Ukraine, Lichtenstein met with couriers who delivered him money that he smuggled back into the U.S.
“Over half a decade, the defendant engaged in what IRS agents described as the most complicated money laundering techniques they had seen to date,” prosecutors wrote.
Bitcoin is the largest and oldest cryptocurrency, which is digital money that typically isn’t backed by any government or banking institution. Transactions get recorded with technology called a blockchain.
The couple successfully laundered about 21 percent of the funds stolen from Bitfinex. The laundered money was worth at least $14 million at 2016 prices. Its value would have exceeded $1 billion at the time of their 2022 arrest.
Authorities seized the remaining funds, collectively valued at over $6 billion at current prices.
“He became one of the greatest money launderers that the government has encountered in the cryptocurrency space,” prosecutors wrote.
An attorney for Bitfinex said the hack “devastated” its finances and its reputation with its customers, with the stolen funds accounting for approximately 36% of the company’s assets at the time of theft.
“Bitfinex had to take unprecedented and immediate action to ensure that any losses from the Hack would ultimately be borne by Bitfinex and its shareholders alone, not its customers,” the lawyer, Barry Berke, wrote in a letter to the judge.
A prosecutor said Lichtenstein immediately began cooperating with federal authorities after his arrest, helping them with other cybercrime investigations.
Over 96% of the stolen funds have been recovered, with help from Lichtenstein, according to defense attorney Samson Enzer. The “vast bulk” of the stolen money was never spent, the lawyer said.
“This is not an evil person,” Enzer said. “This is a good person who made some very bad mistakes.”
___
veryGood! (6)
Related
- 'Squid Game' without subtitles? Duolingo, Netflix encourage fans to learn Korean
- Missouri executes man for 2002 abduction, killing of 6-year-old girl lured to abandoned factory
- Order ‘Mexican Gothic’ author Silvia Moreno-Garcia’s new book, ‘Silver Nitrate,’ today
- Poorly designed crossing contributed to fatal 2022 Missouri Amtrak derailment, officials say
- Hackers hit Rhode Island benefits system in major cyberattack. Personal data could be released soon
- Meet the one Oklahoman who has earned the title of Master Sommelier in 54 years
- Connecticut Sun's Alyssa Thomas becomes first WNBA player to record 20-20-10 triple-double
- How You Can Stay in Gwyneth Paltrow’s Montecito Guest House
- The Best Stocking Stuffers Under $25
- Sofía Vergara responds to Joe Manganiello's divorce filing, asks court to uphold prenup
Ranking
- Person accused of accosting Rep. Nancy Mace at Capitol pleads not guilty to assault charge
- Pre-order the new Samsung Galaxy Watch 6 right now and save up to $300 via trade-in
- Did anyone win Mega Millions last night? See Aug. 1 winning numbers for $1.25B jackpot.
- Gigi Hadid Shares Update on Sister Bella After She Completes “Long and Intense” Lyme Disease Treatment
- Louvre will undergo expansion and restoration project, Macron says
- Erin Foster Responds to Pregnancy Speculation
- TikToker Mikayla Nogueira Addresses Claims She's Taking Ozempic
- SAG-AFTRA is worried about AI, but can it really replace actors? It already has.
Recommendation
What to know about Tuesday’s US House primaries to replace Matt Gaetz and Mike Waltz
Lizzo lawsuit: Singer sued by dancers for 'demoralizing' weight shaming, sexual harassment
10 injured after stolen vehicle strikes pedestrians in New York City, police say
Video shows bear trying to escape California heat by chilling in a backyard jacuzzi
Senate begins final push to expand Social Security benefits for millions of people
Michigan Supreme Court suspends judge accused of covering up her son’s abuse of her grandsons
Malians who thrived with arrival of UN peacekeeping mission fear economic fallout from its departure
Rams WR Cooper Kupp leaves practice early with a hamstring injury