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Ilya Lichtenstein, the person at the middle of the Bitfinex theft in 2016, has reportedly been released from federal custody after serving about 14 months of a five-year sentence.
He was convicted in November 2024 of a money laundering conspiracy related to the theft of about 120,000 Bitcoin, one in every of the most important crypto thefts of all time.
The move has reignited debate about how prison credit and reform laws affect high-value cybercrime cases.
The release of the Bitcoin hacker is attributed to the First Step Act
According to Lichtenstein's public posts and interviews, he attributed his early release to the First Step Act, the prison reform law signed by President Donald Trump in 2018.
He was reportedly confined to his home after qualifying for earned time credit and program participation, a process permitted under federal regulations.
He posted a brief message on social media thanking Trump and saying he hoped to work in cybersecurity in the longer term.
Thanks to President Trump’s First Step Act, I used to be released from prison early.
I remain committed to creating a positive impact on cybersecurity as quickly as possible.
To the supporters, thanks for every part.
To the haters: I stay up for proving you fallacious.
– Ilya Lichtenstein (@cipherstein) January 2, 2026
The theft and the judgment
According to reports from federal prosecutors, the Bitfinex breach involved nearly 120,000 bitcoins, which were price about $71 million on the time and later increased in value as markets rose.
Lichtenstein pleaded guilty and was sentenced to 5 years in prison in U.S. District Court on November 14, 2024. The Justice Department described the cash laundering operation as complex and said prosecutors recovered many of the stolen funds.
Bitcoin is currently trading at $91,256. Chart: TradingView
Details of the case
Lichtenstein and his then-partner Heather Morgan reportedly used layered wire transfers, fake identities and cross-service conversions to hide the origins of the funds.
The pair were arrested in 2022 after agents traced a set of personal keys and other evidence to their accounts.
Morgan, known online as Razzlekhan, also pleaded guilty and received a shorter sentence; She was also reportedly released early.
Image: McAfee
The case attracted widespread attention as agents later seized a big portion of the assets linked to the hack.
Bitcoin recovery, seizures and public response
Federal files and news outlets say investigators have recovered greater than 90% of the stolen bitcoins and the federal government has seized billions in crypto-related assets, a recovery that prosecutors called one in every of the most important in U.S. history.
The sale and custody of those assets remain a part of ongoing administrative operations. Many legal experts and members of the general public object to the timing and optics of early release, arguing that cases involving billions of dollars in stolen property raise unusual questions on deterrence and justice.
Featured image from Unsplash, chart from TradingView
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