US prosecutors have demanded a judge that the mastermind of one of the largest cryptocurrency heists ever should serve five years in jail.
According to a Bloomberg report, the alleged crypto hackers involved in the money-laundering conspiracy connected to the $6 billion Bitfinex exchange breach should receive five years in prison.
The government stated in a court document on Tuesday, October 15th that Ilya Lichtenstein, who entered a guilty plea last year, ought to serve a longer prison sentence than his rapper spouse and fellow conspirator Heather Morgan.
Prosecutors stated last week that Morgan, who went by the moniker “Crocodile of Wall Street,” ought to spend eighteen months behind bars.
What Was The Bitfinex Exchange Breach?
A married couple from New York City entered a guilty plea to charges of money laundering conspiracy related to the hacking and theft of almost 120,000 Bitcoins from Bitfinex, a major cryptocurrency exchange.
Operating since late 2012, Bitfinex is a cryptocurrency exchange based in Hong Kong.
In February 2022, Ilya Lichtenstein, 35, and Heather Morgan, 33, were taken into custody by the US government following the seizure of over 95,000 bitcoin that had been pilfered from cryptocurrency wallets under their custody.
The recovered cash was worth about $3.6 billion at the time of the seizure. The government has apprehended an additional $475 million linked to the hack since their detention.
In 2023, Lichtenstein entered a guilty plea to the charge of conspiring to launder money, which carries a possible 20-year jail sentence. Morgan entered a guilty plea to one count of conspiracy to launder money and one count of conspiracy to defraud the United States, each of which has a five-year maximum prison sentence.
What Happened In The Hack?
Lichtenstein allegedly utilized several sophisticated hacking tools and methods to get into Bitfinex’s network, according to court records. After entering their systems, Lichtenstein illegally approved over 2,000 transactions, including the transfer of 119,754 Bitcoin from Bitfinex to a wallet within Lichtenstein’s jurisdiction.
After that, in an attempt to hide his traces, Lichtenstein returned to Bitfinex’s network and erased any log files and access passwords that would have identified him to authorities. After the hack, Lichtenstein asked his wife Morgan for assistance in laundering the money that had been taken.
The strategy for the hack was rather straightforward. This included creating fictitious accounts and transferring stolen money in tiny amounts over a large number of transactions in order to avoid being discovered.
Computers were used to automate these transactions, and the money was distributed among several virtual currency exchanges. The US business accounts of their businesses served as a mask for all these illicit activities.