US Prosecutors Want to Send Bitfinex Hacker Ilya Lichtenstein to Prison for 5 Years

United States prosecutors are pushing for the man who admitted to stealing 120000 Bitcoin from crypto exchange Bitfinex in 2016 to serve five years behind bars.

United States prosecutors are seeking five years in prison for the man who pleaded guilty to stealing 120,000 Bitcoin from crypto exchange Bitfinex in 2016.

In a filing on Oct. 15, prosecutors with the Washington, DC federal court have asked for Ilya Lichtenstein to serve less than the 20 years he would have received after pleading guilty to one count of conspiracy to commit laundering.

They argued a lighter sentence is warranted because he has no prior criminal history and has given “substantial assistance” that has “benefitted numerous investigations.”

Part of the prosecutor’s sentencing memorandum explaining their recommendation for a reduced prison sentence for Lichtenstein. Source: Pacer

Earlier this month, prosecutors also asked the court to reduce the sentence for Lichtenstein’s accomplice and wife, Heather Morgan, to 18 months in jail for her role in laundering the stolen crypto due to her cooperation.

In their memo, prosecutors said Lichtenstein deserves a lighter sentence as he laundered only about 25,111 Bitcoin ( BTC ) $67,192 out of a possible 120,000, worth $71 million at the time, and attempts to delete incriminating data “did not ultimately hinder the investigation.”

However, they had asked for a longer prison term than Morgan’s as Lichtenstein spent months devising the scheme and experimented with other hacking and financial fraud activities when he stole $200,000 from another crypto exchange.

His conduct represents a new wave of young cybercriminals, and normalizing their online activities might underplay victims’ suffering, and the stronger sentence is necessary to prevent future crimes and “reflect the seriousness of the offense,” prosecutors said.

“While the defendants have certainly cooperated with the government in recovering the residue of the stolen funds following their arrests, it was law enforcement intervention — not any sort of spontaneous remorse on the part of the defendants — that has facilitated those recoveries,” they added.

“The defendant should be held accountable for the full scope of his complex and extensive money laundering conspiracy.”

Prosecutors are also requesting the court order both defendants to return the crypto assets seized by the government from Lichtenstein’s wallet as in-kind restitution to Bitfinex.

The wallet contains about 95,000 Bitcoin, 117,400 Bitcoin Cash ( BCH ) $362.74 , 117,400 Bitcoin Satoshi Vision (BSV) and 118,100 Bitcoin Gold ( BTG ) $23.72 , currently worth over $6 billion.

Lichtenstein and Morgan were initially thought to have only laundered the hack’s proceeds, but Lichtenstein later admitted to also being the hacker.

Lichtenstein’s sentencing is scheduled for Nov. 14, while his wife will be sentenced on Nov. 15.