US Authorities Seek Five-Year Sentence for Bitfinex Hacker

US prosecutors have requested a 60-month prison sentence for Ilya Lichtenstein, who hacked the Bitfinex cryptocurrency exchange for 119,754 BTC in 2016 and laundered the stolen assets.

The recommended sentencing guidelines for the charges range from 121 to 151 months. Authorities justified the reduced sentence by citing the defendant’s cooperation in investigations beyond his own case. This may include testimony against the operator of the Bitcoin Fog cryptomixer, which the hacker used in his schemes.

Justice Department representatives also noted Lichtenstein’s lack of a criminal record and that he laundered only 25,111 BTC of the stolen amount. 

Earlier, prosecutors proposed an 18-month prison sentence for his wife and accomplice, Heather Morgan, despite her facing up to 10 years. This was justified by her “substantial assistance” in the couple’s plea deal and her lesser involvement in their joint crimes.

Authorities insist on a harsher punishment for Lichtenstein, pointing out that he spent months devising the hacking scheme and actively experimented with various hacking attacks and financial manipulations.

The couple initially agreed to plead guilty to conspiracy to launder money, but Lichtenstein’s involvement in the Bitfinex cryptocurrency theft was later established. 

Prosecutors have asked the court to confiscate the hackers’ seized crypto assets totaling approximately $7.6 billion and property valued at ~$72.6 million to pay restitution to Bitfinex. Previously, the Justice Department recognized the exchange as the sole claimant for damages, although they acknowledged there could be other victims of the attack.

Authorities detained Lichtenstein and Morgan in February 2022. It later emerged that law enforcement was able to track them down following the shutdown of the AlphaBay darknet market in 2017.

In February 2022, the court released Morgan on a $3 million bail. She was subsequently spotted at several crypto conferences, sparking speculation about gathering information for the government.