US Prosecutors Seek 5-Year Sentence for Bitfinex Hack Mastermind

US prosecutors have requested a five-year prison sentence for Ilya Lichtenstein, the alleged mastermind behind the 2016 Bitfinex hack that resulted in the theft of 120,000 Bitcoin, valued at approximately $8 billion. In a court filing dated October 15, submitted to the US District Court in Washington, prosecutors argued that Lichtenstein deserves a harsher sentence than his wife, Heather Morgan, also known as rapper “Razzlekhan,” who was involved in the crime.

The prosecutors emphasized that a strong sentence is necessary to deter young cybercriminals from similar offenses, noting that Lichtenstein’s actions have contributed to a culture that downplays the impact of such crimes on victims.

Lichtenstein, who pleaded guilty last year, is set to be sentenced in November alongside Morgan. On October 11, prosecutors recommended an 18-month sentence for Morgan, who admitted to money-laundering conspiracy charges and has cooperated with the government, providing “substantial assistance” in the case.

Lichtenstein has also cooperated in other investigations, which influenced prosecutors to refrain from seeking the maximum sentence for him. In February 2024, he testified as a government witness in a trial concerning a money-laundering service known as Bitcoin Fog.

According to the government, Lichtenstein and Morgan employed sophisticated methods to launder the stolen funds, including transactions through unregulated crypto exchanges and darknet markets. They utilized mixers and tumblers like Bitcoin Fog, Helix, and ChipMixer to obscure their financial trails. Morgan later revealed that she became aware of her husband’s illicit activities in 2020 and assisted him in concealing the funds by purchasing non-fungible tokens, gold, and Walmart gift cards.