Hacker sentenced over bitcoin theft worth billions
A hacker who helped launder the proceeds of a bitcoin theft from a cryptocurrency exchange was sentenced to five years in prison for his role in the conspiracy.
The Justice Department (DOJ) said in a release that Ilya Lichtenstein, 35, hacked into the network of crypto exchange Bitfinex in 2016 using sophisticated hacking tools to fraudulently authorize over 2,000 transactions that transferred 119,754 bitcoin from the exchange to a crypto wallet he controlled. He then deleted files from the exchange's access logs that could've revealed his actions to law enforcement.
Lichtenstein's scheme to launder the ill-gotten gains was aided by his wife Heather Morgan, a rapper who goes by the stage name "Razzlekhan" and went viral on social media platforms after the case was revealed.
The pair deployed what the DOJ called "numerous sophisticated laundering techniques" to launder the bitcoin; using fictitious identities to set up online accounts; automated transactions; and depositing stolen funds into darknets and crypto exchanges, then withdrawing the funds.
They converted bitcoin to other cryptocurrencies – a practice known as "chain hopping" – and deposited the criminal proceeds into crypto mixing services. The duo also utilized U.S.-based accounts to legitimize banking activity and swapped some of the stolen funds for gold coins.
Prosecutors wrote in a filing that Lichtenstein told Morgan about the hack three years later, though he previously obtained her assistance in the scheme "without explaining exactly what he was doing."
The stolen bitcoin was worth roughly $70 million at the time it was stolen, though that rose to over $4.5 billion at the time of their arrest and is worth more than twice that amount at current prices.
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