Ilya Lichtenstein — the man accused of orchestrating one of crypto’s most infamous heists — has been released early from prison after serving roughly 14 months of a five-year sentence, citing the bipartisan First Step Act as the reason.
Lichtenstein announced his release on X, thanking the law signed by President Trump in December 2018. “Thanks to President Trump’s First Step Act, I have been released from prison early,” he wrote, adding that he remains committed to “making a positive impact in cybersecurity” and promising to prove “the haters” wrong. At his sentencing he had expressed remorse for using his skills for criminal activity rather than a “positive contribution to society.”
The First Step Act, signed into law on December 21, 2018, introduced criminal justice reforms that include a “risk and needs assessment system” and expanded rehabilitative programming. Those provisions can make some inmates eligible for early transfer to home confinement. A Trump administration official told CNBC on January 2 that Lichtenstein “has served significant time on his sentence and is currently on home confinement consistent with statute and Bureau of Prisons policies,” adding that the president was not personally involved in the decision.
Background on the hack and laundering
In 2016 Bitfinex was targeted in a massive breach that prosecutors say involved advanced hacking techniques. The U.S. Department of Justice says Lichtenstein routed 119,574 Bitcoin through more than 2,000 transactions into his crypto wallets. At the time of the theft the haul was worth about $71 million; at today’s prices those coins are worth nearly $11 billion.
Heather Morgan — the rapper known online as “Razzlekhan” and Lichtenstein’s wife — was convicted for helping launder proceeds from the theft. Prosecutors say she used fake identities, created accounts on darknet markets and exchanges, converted BTC into other tokens, and used mixers to obscure funds. The pair allegedly laundered roughly 21% of the stolen assets.
Morgan was sentenced to 18 months on November 18, 2024, entered prison in February 2025, and was released after eight months under provisions of the First Step Act. She celebrated the reunion with Lichtenstein as “the best New Year’s present” and publicly thanked President Trump for shortening her sentence, while officials made clear the president himself did not make the release decision.
Prosecutors had described Morgan as “a willing participant” in the laundering but a “lower-level participant,” a characterization that contributed to her lighter sentence compared with Lichtenstein’s.
What this means for crypto
The case remains a landmark in crypto law enforcement — illustrating both the scale of risks exchanges face and the challenges of tracking and recovering laundered assets. The couple’s early releases under the First Step Act add a legal justice dimension to a story that began in cybersecurity and ended in one of crypto’s highest-profile criminal prosecutions.
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