Ilya Lichtenstein, the infamous tech entrepreneur responsible for the largest ‘cryptocurrency’ heist in history, has been sentenced to five years in prison for stealing $10 billion worth of BTC from the Bitfinex exchange.
Lichtenstein and his rapper wife, Heather Morgan, pleaded guilty to money laundering conspiracy in August. Liechtenstein orchestrated the 2016 hack of Bitfinex, which siphoned 119,754 BTC from the exchange through at least 2,000 transactions. He then deleted access credentials and other log files from the exchange, making them untraceable. His wife claimed she had no knowledge of the crime, but later admitted that she helped Lichtenstein launder at least 25,000 BTC through fake identities, darknet markets, and digital asset exchanges and commingling.
Lichtenstein was imprisoned for 20 years for his crimes. But prosecutors called for a more lenient sentence, arguing that he was cooperative, had no criminal record, and only laundered about 20% of the BTC he stole. He also assisted authorities in recovering most of the remaining BTC.
Judge Colleen Kollar-Kotelly sentenced Lichtenstein to five years in prison Thursday in U.S. District Court in Washington, D.C. He took into account the two years and nine months Lichtenstein has spent in prison since his arrest in February 2022. He also sentenced the New Yorker to three years of supervised release.
The judge noted that it was important for the court to send the message that “committing these crimes does not go unpunished and there are consequences.” He added that Lichtenstein had “carefully planned” the robbery for several months and that it was not an impulsive act.
The 35-year-old took full responsibility for his actions in a remorseful speech before sentencing, the Associated Press reported. He regretted “wasting my talents on crime instead of making positive contributions to society,” and vowed to use his expertise for good once he gets out of prison.
Judge Kollar-Kotelly is scheduled to sentence Morgan on Monday, November 18. Morgan, formerly a rapper named ‘Razzlekhan’, is likely to receive a lighter sentence. Prosecutors recently recommended she be sentenced to 18 months in prison, which they said would “appropriately serve the cause of justice.” They claimed that Morgan was not involved in the robbery and that her husband brought her in to launder the proceeds.
The couple’s downfall came when they used some of their stolen BTC to purchase Walmart gift cards. Investigators discovered the gift cards had been exchanged using Morgan’s Walmart app, and identified them as the culprit in the hack after obtaining search warrants for his home and online accounts.
Indian police arrest $235 million WazirX hacker
Indian police have arrested a man from eastern Bengal who they say was deeply involved in the $235 million hack of local exchange WazirX in July.
Hackers attacked the exchange on July 18 targeting Ethereum hot wallets, draining almost 50% of the funds. Digital asset investigators have revealed that hackers modified the signatures required to authorize such transactions by tricking members of the exchange’s security team into altering smart contracts that would thwart such attempts.
Police in the capital New Delhi said on Thursday that they had arrested the man who created the fake account that led the attack. The disclosure adds credence to the exchange’s long-held defense of denying that the attack was the result of poor internal security measures.
The complaint, seen by media outlets, alleges that the arrested man, SK Masood Alam, was part of a hacker ring that opened virtual accounts to infiltrate the exchange. Alam reportedly claimed that he was offered a “modest amount” of money by another Telegram user for the WazirX account, which was later used to carry out the attack.
The complaint further fanned the flames of conflict and blame game between WazirX and Liminal Custody, the digital asset management company the exchange relies on to protect user assets.
Following the breach, Liminal blamed the exchange, claiming its internal systems had been compromised. However, a few days later, WazirX claimed that it had conducted a preliminary investigation and found “no evidence that any WazirX signer’s computer had been compromised.” Three months later, Liminal blamed the exchange on a “disinformation campaign” and denied any role in the breach.
Delhi police now allege that Liminal has refused to cooperate with investigators, frustrating their efforts to recover the lost funds and nab the criminals. When he finally cooperated, Liminal still withheld “significant information” from investigators, raising more questions about the custodian’s role in the breach, charging documents say. Liminal’s security vulnerabilities could affect multiple players that use the storage solution, including India’s Central Bureau of Investigation (CBI).
See: Digital Asset Recovery Takes Token Recovery Seriously.
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