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The US Department of Justice (DoJ) announced that Ilya Lichtenstein, convicted of masterminding the laundering of nearly 120,000 Bitcoin stolen from Bitfinex in 2016, was sentenced today to five years in prison. 

According to the DoJ, Lichtenstein exploited vulnerabilities in Bitfinex's systems to move bitcoin into his control and subsequently launder the assets with assistance from his wife, Heather Morgan.

Court records indicate that Lichtenstein used advanced hacking techniques to authorize unauthorized transactions within Bitfinex’s network, transferring the funds to a personal cryptocurrency wallet. In the days following the hack, Lichtenstein reportedly took deliberate steps to erase digital traces, removing login credentials and transaction logs to hinder detection.

According to the DoJ, Lichtenstein and Morgan engaged in sophisticated methods to obscure the bitcoin's origins, employing techniques such as "chain hopping"—exchanging bitcoin for other cryptocurrencies—using fake identities, automating transactions across darknet marketplaces, and depositing portions of the funds into cryptocurrency mixers. 

Additionally, they are said to have routed some of the funds through U.S.-based business accounts and converted a portion of the proceeds into gold.

Both Lichtenstein and Morgan pleaded guilty to conspiracy to commit money laundering in August 2023. The sentencing also includes three years of supervised release for Lichtenstein, while Morgan’s sentencing is scheduled for later this month.

The sentencing announcement was delivered by officials from the Justice Department, along with contributions from the IRS, FBI, and Homeland Security Investigations.