A hacker liable for stealing 119,754 Bitcoin in a 2016 hack on the Bitfinex cryptocurrency change was sentenced to 5 years in jail by U.S. authorities.
The person, Ilya Lichtenstein, was arrested in February 2022 in Manhattan following a prolonged investigation led by the IRS, HSI, and the FBI, which managed to get well roughly 80% of the stolen cryptocurrency (94,000 Bitcoin)/
On the time of the theft, the 119,754 bitcoins had been price $78,000,000 however equaled $3.6 billion on the time of the seizure.
Lichtenstein confronted cash laundering accusations, with proof pointing to him utilizing a number of schemes, together with establishing a number of on-line accounts utilizing fictitious identities, transaction-automating software program instruments, spreading stolen funds throughout a number of darknet markets, and interesting in “chain hopping.”
“According to court documents, Lichtenstein, 35, hacked into Bitfinex’s network in 2016, using advanced hacking tools and techniques,” reads yesterday’s U.S. Division of Justice announcement.
“Once inside the network, Lichtenstein fraudulently authorized more than 2,000 transactions transferring 119,754 bitcoin from Bitfinex to a cryptocurrency wallet in Lichtenstein’s control.”
The hack was made potential by way of a vulnerability in Bitfinex’s multi-signature withdrawals system, which allowed the cybercriminal to bypass the required approval from BitGo to withdraw the funds.
The hacker exploited the flaw to authorize direct withdrawals and in addition steal person credentials. If the identical credentials had been used on different exchanges, he emptied their accounts from these too.
Lichtenstein tried to obscure his hint and hamper investigations by deleting log recordsdata that contained proof of his actions from Bitfinex’s community.
He additionally patiently waited a number of months earlier than making an attempt to maneuver the stolen cash round, beginning with small transfers unfold throughout numerous accounts. Lichtenstein was additionally helped by his spouse, Heather Morgan, to launder the stolen funds.
By 2019, Lichtenstein’s cash laundering operation had grown to full scale, involving tens of hundreds of middleman addresses, mixing companies, and a number of obfuscation steps.
Supply: TRM Labs
On August 3, 2023, Lichtenstein pleaded responsible to the cash laundering expenses, which incurred a most 20 years imprisonment sentence.
Ultimately, the person bought one fourth of that, with the choose setting the punishment to 5 years, ranging from November 18, 2024, plus three years of supervised launch.
Furthermore, as this case is ruled by Rule 32.2 of the Federal Guidelines of Prison Process, the authorities give anybody who believes they’ve the best to the seized belongings (Bitcoin, USDC, USDT, Ether, and gold cash) to submit a declare for restitution.
Lichtenstein’s spouse, Heather “Razzlekhan” Morgan, who is taken into account an confederate within the cash laundering course of, is scheduled to be sentenced on November 18, 2024.
