Bitfinex Hacker Ilya Lichtenstein Released Early; Credits Trump’s First Step Act
The mastermind behind the $10B Bitfinex hack walks free after serving 14 months post-sentencing, reigniting the debate on crypto crime deterrence.
Ilya Lichtenstein, the architect of the 2016 Bitfinex hack that siphoned 119,754 Bitcoin, is free. The 38-year-old was released from federal custody on January 2, serving just 14 months of a five-year sentence handed down in November 2024.
Lichtenstein, who pleaded guilty to laundering the stolen funds, valued at $4 billion at the time of seizure and over $10 billion today, attributed his early exit to the First Step Act. In a statement posted to X, he explicitly thanked President Donald Trump for the bipartisan prison reform law, which allows non-violent offenders to earn time credits for recidivism-reduction programming.
The Math on the Sentence
The math behind the release has raised eyebrows among security professionals. Lichtenstein faced a maximum of 20 years. He ultimately received 60 months (5 years) but was credited for roughly 33 months of time served since his February 2022 arrest. The remaining balance of roughly 27 months was cut nearly in half through the First Step Act credits.
"Thanks to President Trump’s First Step Act, I have been released from prison early," Lichtenstein wrote, confirming his transition to home confinement.
His wife and co-conspirator, Heather "Razzlekhan" Morgan, beat him to the exit. Morgan was released in October 2025 after serving roughly eight months of her 18-month sentence for her role in laundering the proceeds.
Institutional Signal: The deterrence Gap
Lichtenstein’s release marks another data point in what market observers call a softening stance on white-collar crypto crime under the current administration. Coming on the heels of similar clemency decisions involving high-profile figures like Ross Ulbricht, the trend suggests a shift from punitive enforcement to rehabilitation for non-violent digital offenses.
Security researchers warn this creates a dangerous asymmetry. While on-chain forensics have improved, Lichtenstein’s seizure remains the largest in U.S. history. The penalty for stealing $10 billion in assets has effectively netted out to less than four years of total confinement. As crypto hacks remain a primary revenue stream for nation-state actors, the shrinking cost of capture may force exchanges to drastically re-evaluate their insurance and custody models.
