Key Highlights
- Ilya Lichtenstein, who stole 120,000 Bitcoin from Bitfinex in 2016, was released from prison early on January 2, due to credits earned under former President Donald Trump’s First Step Act
- He and his wife, Heather Morgan, aided their case by pleading guilty and providing crucial cooperation to U.S. authorities, including testimony that helped convict another crypto crime figure
- The recovered Bitcoin, now worth over $10 billion, was ordered by a court to be returned directly to Bitfinex in 2025
On January 2, 2026, Ilya Lichtenstein announced his early release from federal prison. Ilya Lichtenstein is the man who admitted to masterminding the massive 2016 hack of the cryptocurrency exchange Bitfinex.
Thanks to President Trump’s First Step Act, I have been released from prison early.
I remain committed to making a positive impact in cybersecurity as soon as I can.To the supporters, thank you for everything.
To the haters, I look forward to proving you wrong.— Ilya Lichtenstein (@cipherstein) January 2, 2026
In a latest post on the social media platform X (formerly Twitter), he directly credited a law signed by former President Donald Trump for his changed circumstances. “Thanks to President Trump’s First Step Act, I have been released from prison early,” Ilya Lichtenstein wrote.
The announcement brought renewed attention to one of the largest and most infamous financial thefts in modern history. The Bitfinex hack resulted in the loss of nearly 120,000 Bitcoin from Bitfinex. At the time of the crime in 2016, that cache was worth about $72 million.
By the time U.S. authorities recovered the bulk of the funds in 2022, its value had ballooned to approximately $3.6 billion. Today, with Bitcoin’s price at record highs, that stolen fortune would be worth well over $10 billion.
Mastermind Behind Bitfinex: The Long Road from Heist to Arrest
The Bitfinex hack occurred in August 2016. A hacker exploited a weakness in the multi-signature wallet system Bitfinex used, which was provided by its security partner, BitGo. In two unauthorized transactions, a total of 119,756 Bitcoin vanished. For years, the identity of the thief remained a mystery, a legendary unsolved case in the crypto world.
That mystery ended in February 2022. Federal authorities arrested Ilya Lichtenstein, a Russian-American technology entrepreneur, and his wife, Heather Morgan, in New York. Through sophisticated blockchain analysis, investigators had traced the movement of the stolen funds. They discovered that Ilya Lichtenstein and Morgan were allegedly laundering the Bitcoin through various methods, including cryptocurrency mixing services and darknet markets. At the time of the arrest, the government seized about 94,000 Bitcoin from wallets they controlled.
In August 2023, both Lichtenstein and Morgan pleaded guilty to conspiracy to commit money laundering. During the proceedings, Lichtenstein made a stunning admission to U.S. District Judge Colleen Kollar-Kotelly. He stated that he was solely responsible for the hack itself, using advanced hacking techniques to break into Bitfinex’s systems and cover his tracks.
He claimed the theft happened before he even began his relationship with Morgan. Morgan pleaded guilty to lesser charges for her role in the complex money laundering operation that followed the theft.
The couple’s sentencing came in November 2024. Judge Kollar-Kotelly sentenced Lichtenstein to 5 years in prison, with credit for the time he had already served since his 2022 arrest. Morgan was sentenced to 18 months and was released in October 2024. A key factor in their sentencing was their extensive cooperation with federal prosecutors.
Lichtenstein provided crucial testimony in March 2024 that helped convict Roman Sterlingov, the operator of the Bitcoin Fog mixing service.
How the First Step Act Led to Early Release
Ilya Lichtenstein’s early exit from prison is a direct result of the First Step Act. This was a bipartisan criminal justice reform bill signed into law by former President Donald Trump in December 2018.
The law allows federal inmates convicted of non-violent offenses to earn credits toward early release or transfer to supervised programs, such as home confinement.
Inmates earn these credits by participating in and completing rehabilitation programs, vocational training, and maintaining good conduct while incarcerated. Because Lichtenstein’s crime was classified as non-violent, despite its enormous scale, he was eligible.
Prison records initially listed his release date as February 9, 2026, but the accumulation of these credits allowed for an accelerated release this month. The Federal Bureau of Prisons has not issued an official statement confirming his release.
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