The man behind one of the largest Bitcoin thefts in history is no longer behind bars.
Ilya Lichtenstein, who admitted to orchestrating the 2016 Bitfinex hack, has been released from US federal prison more than a year after being sentenced. His early release was granted under the First Step Act, a criminal justice reform law signed during Donald Trump’s first presidency.
Lichtenstein confirmed the news himself in a public post, stating that the legislation allowed him to leave custody earlier than expected. He also indicated that he intends to work in cybersecurity moving forward, though no further details were provided.
The release comes less than 18 months after his sentencing in November 2024, when a US court handed him a five-year prison term following a guilty plea to conspiracy to launder cryptocurrency tied to the Bitfinex breach.
Gemini Context and the Bitfinex Case Fallout
The Bitfinex hack remains one of the most consequential incidents in Bitcoin history.
Nearly 120,000 Bitcoin were stolen in 2016, an amount that would later be valued in the billions of dollars during peak market cycles. Federal investigators spent years tracking the funds across thousands of blockchain transactions before arresting Lichtenstein and his wife, Heather Morgan, in 2022.
Court records show that Lichtenstein admitted to carrying out the hack himself and later moving large portions of the stolen Bitcoin through complex laundering methods. During sentencing proceedings, he argued that Morgan had no role in the initial breach and claimed she was unaware of the hack for years.
Morgan, who also faced charges related to laundering the stolen funds, received an 18-month sentence. She announced her own early release in October, several months before her husband. After Lichtenstein’s release, she shared a photo of the couple and described the moment as a long-awaited reunion following years of separation.
Federal filings indicate that while thousands of individuals were affected by the Bitfinex hack, the exchange itself may be the only entity legally eligible for reimbursement. Authorities previously asked victims to submit impact statements as part of the ongoing restitution process.
The case has drawn sustained public attention, including coverage in a Netflix documentary series and an upcoming feature film, highlighting how the stolen Bitcoin remained dormant for years before being partially recovered by law enforcement.
Trump Signals Broader Review of Crypto Crime Cases
Lichtenstein’s release coincides with renewed attention on how the US government handles high-profile crypto crime convictions.
Donald Trump recently stated that he would review the case of Samourai Wallet co-founder Keonne Rodriguez, suggesting the possibility of executive intervention, though he emphasized that he had not yet examined the details.
Trump’s record includes several controversial crypto-related pardons. Shortly after taking office in January last year, he issued a full pardon to Ross Ulbricht, the founder of the Silk Road marketplace. In October, he also pardoned Binance founder Changpeng Zhao.
While Lichtenstein did not receive a pardon, his early release under the First Step Act underscores how legislative reforms continue to shape outcomes in major cryptocurrency cases.
For the crypto industry, including platforms like Gemini that operate under intense regulatory scrutiny, the case serves as a reminder that enforcement actions do not always end at sentencing and that policy shifts can significantly alter legal timelines.
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