Prosecutors urge five year sentence for Lichtenstein after his guilty plea to money laundering charges in the 2016 Bitfinex hack.
Prosecutors are requesting that Ilya “Dutch” Lichtenstein should serve five years in prison for his role in the 2016 Bitfinex hack, according to Bloomberg. This request follows Lichtenstein’s guilty plea to conspiracy charges related to money laundering in August 2023.
Lichtenstein and his wife Heather ‘Razzlekhan’ Morgan were arrested in February 2022 for money laundering in the hack of Bitfinex, in which about 120000 bitcoins were stolen. At first, Lichtenstein and Morgan were only accused of laundering the stolen bitcoin, equivalent to about $7.5 billion in today’s value. However, Lichtenstein later came forward as the original hacker of the attack.
Lichtenstein and Morgan Laundered 25,111 Bitcoins Using Complex Methods
Official records show that the couple settled 25,111 bitcoins, constituting 21% of the stolen value. They employed several bank accounts in Eastern European countries and Bitcoin tumbler services to wash the funds’ sources. The prosecutors pointed out that the laundering techniques they used were among the most complex the IRS had ever observed.
However, the same law that makes Lichtenstein eligible for a maximum of 20 years behind bars would see Morgan spend a mere 18 months in jail. She entered a guilty plea to a lesser form of money laundering. Prosecutors pointed out that Morgan did not know about the crime until 2020. At that time, Lichtenstein proposed that she use the stolen bitcoins through a money laundering service.
In contrast, the prosecutors claim that Lichtenstein should be punished more severely. They insisted that he had been plotting the hack for months. Moreover, Lichtenstein has hacking and fraud in his record. Later in 2016, the same year he began trading at the exchange, he fraudulently transferred $200,000 to his personal account. Crown prosecutors think the harsh sentence would deter other such individuals, particularly youths.
At the same time, prosecutors also recognize that Lichtenstein is not a candidate for reoffending. They claim his past behaviors were caused by substance abuse, particularly the improper use of Adderall. They all pray that, given his background, he will now work for the right side of the law. However, they have expected him to work on cybersecurity and combating money laundering in the future. Even though Lichtenstein committed a serious offense, the prosecutors think his actions can change after receiving the sentence and in his work activity.
As part of his plea, Lichtenstein agreed to forfeit all the proceeds from his crime.
