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Ilya Lichtenstein, the man behind the massive 2016 Bitfinex Bitcoin hack, has been released early from federal custody.
Author: Sahil Thakur
Published On: Sat, 03 Jan 2026 03:21:13 GMT
3rd January 2026 – Ilya Lichtenstein, the man behind the massive 2016 Bitfinex Bitcoin hack, has been released early from federal custody. On January 2, 2026, authorities granted his early release after he served just one year of a five-year sentence.
Lichtenstein’s release comes through provisions in the First Step Act, a criminal justice reform law signed in 2018 by then-President Donald Trump. Designed to reduce recidivism and focus on rehabilitation, the law allows non-violent federal inmates to earn time credits and reduce prison time through participation in approved programs.
In a post on X, Lichtenstein acknowledged the law’s role. “Thanks to President Trump’s First Step Act, I have been released from prison early,” he wrote. He also added that he aims to make a positive impact in cybersecurity.
In 2016, hackers broke into Bitfinex and took 119,756 bitcoin. The stash was worth about $72 million. The theft shook the crypto market. Bitfinex froze trading and withdrawals. The company spread losses across customer balances. It issued BFX tokens to make up the difference. Investigators later connected the hack to Ilya Lichtenstein. Ilya controlled the wallets with the stolen coins. He moved the money through darknet markets, mixers, and exchanges. He also turned some of it into gold and other cryptocurrencies. His wife, Heather Morgan, helped launder part of the funds.
Finally, U.S. agents accessed one of his cloud accounts. They found private keys. They then seized about 94,000 bitcoin worth billions. Lichtenstein and Morgan pleaded guilty. The court sentenced him to five years. She received 18 months. Lichtenstein later claimed he acted alone. He eventually moved to home confinement after earning credits. The case shows how patient tracking and strong legal pressure can still unravel complex crypto crimes.
Lichtenstein was convicted in 2024 for his role in the 2016 Bitfinex hack, where nearly 120,000 BTC were stolen through more than 2,000 unauthorized transactions. At current market prices, that stash is valued at over $10 billion.
Court records and his guilty plea confirmed that Lichtenstein acted alone in orchestrating the breach. He manipulated internal authorization systems and moved the stolen Bitcoin into wallets under his control. Over several years, he attempted to launder the funds, with help from his wife, Heather Morgan.
Authorities later seized most of the stolen Bitcoin, in what remains the largest crypto asset recovery in U.S. history.
Morgan, who assisted in laundering the stolen Bitcoin, was also sentenced in 2024. Though prosecutors stated her role was smaller, she pleaded guilty to money laundering. In October 2025, she claimed early release in a post from a bathtub, again thanking Trump.
However, a White House official clarified that the administration had no involvement in Morgan’s release. Both Morgan and Lichtenstein now appear to be under home confinement, according to Bureau of Prisons protocols.
Lichtenstein’s early release is part of a growing trend during Trump’s return to the White House. Other high-profile crypto figures have also received clemency.
Former Binance CEO Changpeng Zhao received a pardon after pleading guilty to AML violations. Silk Road founder Ross Ulbricht was also pardoned after more than a decade in prison. These decisions have sparked a debate in crypto circles and beyond.
Supporters argue that rehabilitation and fair sentencing should be prioritized over symbolic punishment. On the other hand, critics worry that early releases could undermine deterrence and give rise to a “crime is legal” mindset in the space.
Now free, Lichtenstein appears eager to re-enter the tech world. On Friday, he posted, “I’ve been offline for 4 years. What’s the fastest way to get up to speed with AI?”
For now, his release adds another chapter to the complex narrative of crypto, crime, and the changing face of justice in the digital age.
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TECH: Bitfinex hacker Ilya Lichtenstein credits Trump’s First Step Act for early prison release https://t.co/RIy72obmqp
Ilya Lichtenstein, Bitcoin hacker behind massive crypto theft, credits Trump for early prison release https://t.co/k35Eym3Dfi
Bitfinex 2016 hack mastermind Ilya Lichtenstein has been released early, citing sentence reductions under the U.S. First Step Act signed by President Trump in 2018. Lichtenstein was sentenced to five years in November 2024 for laundering nearly 120,000 BTC (~$4.5 billion at the
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