Bitfinex 2016 Hack Culprit Caught, Pleads Guilty to Money Laundering

Ilya Lichtenstein pleaded guilty to a conspiracy to launder stolen Bitcoin, originally acquired through the 2016 Bitfinex hack, in a federal court in Washington, D.C. The amount, worth $70 million at the time of the theft, has since soared to a value of $4.5 billion, according to a CNBC report.

The Department of Justice’s charges against Lichtenstein and his wife, Heather Rhiannon Morgan, are related to money laundering but not the original hack. The DOJ seized more than 94,000 of the over 119,000 hacked BTC in February 2022, marking its largest seizure ever.

Bitfinex, one of the largest and most prominent cryptocurrency exchanges, was hacked in 2016, leading to the theft of 119,000 BTC. The identity of the hacker remained unknown until Lichtenstein’s admission.

The couple was arrested earlier this year, and the seized Bitcoin, worth about $3.6 billion, was part of an intricate laundering process involving Lichtenstein’s travel to Ukraine and Kazakhstan, where he converted digital assets to cash through Russian and Ukrainian intermediaries.

“‘In actuality, Lichtenstein and Morgan used the account to launder proceeds of the hack of’ Bitfinex, the filing charges.”

Lichtenstein will remain jailed until sentencing on a count of conspiracy to commit money laundering. He has agreed to cooperate with federal investigators. Morgan, who has been free on a $3 million bond since her arrest, appeared in court for her husband’s plea hearing.

Further details, such as Lichtenstein’s conversion of some assets to gold coins and Morgan’s involvement in burying them, were revealed during the plea hearing. Additionally, a charging document filed last month revealed the couple’s manipulation of small, complex transactions to conceal the stolen funds.