After seven years, the vague identity of the infamous hacker behind the hack of the Hong Kong-based cryptocurrency exchange Bitfinex has come to light. On Thursday, CNBC reported that Ilya Lichtenstein, a New York resident, has pleaded guilty to being the culprit. His wife will also be prosecuted for aiding him in the mischievous act.
How Did Bitfinex Hack Occur?
Bitfinex was hacked for 119,754 BTCs in 2016. At the time of the theft, the equivalent of the total BTC was about $76 million. However, Bitcoin’s current price puts the valuation of the stolen funds at a whopping $4.5 billion. Recall that the company made conscious efforts to retrieve the funds in 2020, even offering a percentage of the assets to anyone who retrieves them. The hacker was also able to return the funds in exchange for a cut.
To get a hold of the BTC holdings, the hackers used sophisticated hacking tools to gain access to two security keys for the exchange, ultimately leading to Bitfinex’s exploit. Lichtenstein authorized over 2,000 transactions, funneling the stolen assets into his control.
Lichtenstein went further to clear his tracks by deleting access credentials and other log files that connect him to the case. He further admitted the support of his wife, Heather Morgan, in facilitating the attack. His wife is currently liable for a possible five years of jail time.
Lichtenstein Pleads Guilty to Bitfinex Exploit
While pleading guilty in a United States court, Lichtenstein shared details on how the stolen funds were moved across several wallets and countries. Some of the assets were converted to gold coins that Morgan had secretly buried in a location now known to government authorities.
Lichtenstein had also traveled to Ukraine and Kazakhstan to convert parts of the stolen BTCs into cash through third-party entities and subsequently deposited them into U.S. accounts.
Following the couple’s arrest in February 2022, law enforcement confiscated around 95,000 BTCs discovered in Lichtenstein’s control. The recovered assets were worth $3.6 billion at the time of the seizure, making it the biggest crypto-hack-related confiscation the U.S. government had ever done. Following their arrests, authorities have further seized $475 million worth of stolen assets.
