Ilya Lichtenstein confessed in court on Friday that he was responsible for hacking the cryptocurrency exchange Bitfinex in 2016 and stealing 120,900 Bitcoin. Previously, Mr. Lichtenstein had agreed to forfeit billions of dollars as part of a plea deal relating to his role in laundering the stolen funds. Though it had long been speculated that either Mr. Lichtenstein or his wife Heather Morgan were behind the hack, his admission in court provides the first definitive confirmation that he perpetrated the theft. This new information was originally reported by CNBC. The sentencing hearing took place in Washington D.C.
At the court hearing, Mr. Lichtenstein confessed that after hacking Bitfinex, he and his wife Heather Morgan converted some of the stolen cryptocurrency into gold coins which they proceeded to bury. As reported by CNBC, Mr. Lichtenstein also admitted to flying to Ukraine and Kazakhstan to convert the stolen cryptocurrency into cash. The cash was then deposited into a bank account in the United States.
Mr. Lichtenstein and Ms. Morgan were arrested last year and charged with laundering the funds from the 2016 Bitfinex hack. They potentially face up to 20 years in prison for their crimes. Ms. Morgan is also known by her rapper stage name “Razzlekhan.”
As part of their plea agreement, Mr. Lichtenstein and Ms. Morgan have consented to relinquish the profits obtained from laundering approximately 120,000 Bitcoin stolen in the 2016 Bitfinex hack. When initially detained, the Department of Justice seized $3.6 billion worth of Bitcoin that was linked to the hack.
In a press statement, Deputy Attorney General Lisa O. Monaco asserted that this was the Department of Justice’s largest ever confiscation of cryptocurrency assets. She stated that it demonstrated that “cryptocurrency is not a safe haven for criminals.”
Prior to the arrest of Mr. Lichtenstein and Ms. Morgan, investors had been utilizing blockchain data to trace the stolen funds. This transparency was frustrating for the victims as they could see their money being transferred but were powerless to recover it. In the weeks leading up to the announcement of the plea agreement in July 2022, the cryptocurrency exchange Bitfinex was able to recover approximately $314,000 worth of the stolen Bitcoin Cash. However, the vast majority of the hacked funds have still not been returned to the affected users.
