US Seeks 5-Year Sentence for Ilia Lonstein, Orchestrator of $6 Billion Bitfinex Hack

US Seeks 5-Year Sentence for Ilia Lonstein, Orchestrator of $6 Billion Bitfinex Hack

Background on the Case

Bitfinex Ilia Lonstein prosecutors contend that Ilia Lonstein deserves a longer sentence than his wife Heather Morgan for their roles in the Bitfinex hack. Last updated October 16, 2024, at 08:28 GMT plus 3.

About the Author

Crypto reporter Shalin Nagarajan. Shalin is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

Why Trust Crypton?

With over a decade of crypto coverage, Crypton delivers authoritative insights you can rely on. Our veteran team of journalists and analysts combines in-depth market knowledge with hands-on testing of blockchain technologies. We maintain strict editorial standards, ensuring factual accuracy and impartial reporting on both established cryptocurrencies and emerging projects. Our long-standing presence in the industry and commitment to quality journalism make Krypton a trusted source in the dynamic world of digital assets.

Sentencing Recommendations

US prosecutors urged a judge to sentence Ilia Lonstein, mastermind of the $6 billion Bitfinex hack, to 5 years in prison for his role in a money laundering conspiracy. In addition to the 5-year term, they also recommended 3 years of supervised release, according to a court filing on Tuesday. This means that the person, while out of prison, remains under the watchful eye of the criminal justice system.

Arguments for a Longer Sentence

Prosecutors argued that Lonstein, who pleaded guilty last year, deserves a longer prison sentence than his wife and accomplice, Heather Morgan. Last week, they recommended an 18-month sentence for Morgan, also known as the “Crocodile of Wall Street.”

Details of the Hack

Lonstein led the 2016 Bitfinex hack, stealing about 120,000 Bitcoin with his wife Morgan, initially worth $71 million. The stolen Bitcoin’s value soared as prices surged, marking it among the largest crypto thefts ever.

Money Laundering Tactics

Lonstein allegedly used advanced laundering tactics to obscure the stolen funds. He created fake identities for online accounts, automated transactions, and channeled money through dark web markets like Alphabay and Hydra. He also swapped Bitcoin for other cryptocurrencies, used mixing services like Bitcoin Fog for anonymity, and converted some funds into gold coins, which he physically hid.

Guilty Pleas and Upcoming Sentencing

Lonstein pleaded guilty to conspiring to launder money, while Morgan admitted to conspiracy charges related to money laundering and defrauding the US. Lonstein’s sentencing is slated for November 14th, with Morgan’s following on November 15th.

Upcoming Film Adaptation

Amazon’s production arm is currently in the works to produce a film titled “Razzle Can,” inspired by the couple’s actions. The screenplay is influenced by a 2022 New York Times article that outlined the duo’s involvement in laundering proceeds from the Bitfinex hack.

Cooperation with Authorities

Prosecutors opted against seeking the maximum sentence for Lonstein, citing his cooperation in other legal cases. Earlier this year, he testified as a witness for the federal government in the Bitcoin Fog trial.

 

Leave a Reply

Your email address will not be published. Required fields are marked *