Convicted Bitfinex bitcoin launderer freed from prison, thanks Trump law

Ilya Lichtenstein was supposed to serve five years after being sentenced in late 2024.

A hacker who pleaded guilty to conspiring to launder billions of dollars worth of bitcoin stolen in the 2016 Bitfinex hack has been released from prison, a little more than one year after being sentenced to a five-year stint.

Ilya Lichtenstein posted on X that his early release came as a result of a bipartisan 2018 law that President Donald Trump signed in his first term that was meant to reduce the federal inmate population.

“Thanks to President Trump’s First Step Act, I have been released from prison early,” he wrote last week. “I remain committed to making a positive impact in cybersecurity as soon as I can.”

The Bitfinext hack eventually led to what the Justice Department said was, at the time of the arrest of Lichtenstein in 2022, the then-biggest federal recovery and seizure of stolen bitcoin, worth $3.6 billion. Authorities accused Lichtenstein and his wife, Heather Morgan — a rapper on the side who went by the name Razzlekhan — of laundering $4.5 billion from the Bitfinex hack.

It’s a quick reversal from Lichtenstein’s sentence issued in November 2024. At the time of the arrest of the Manhattan couple, law enforcement touted its pursuit of crypto criminals.  

“Today’s arrests, and the department’s largest financial seizure ever, show that cryptocurrency is not a safe haven for criminals,” said then-Deputy Attorney General Lisa Monaco. “In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions.”

Lichtenstein on X hailed himself as a “hacker on the road to redemption,” adding, “To the supporters, thank you for everything. To the haters, I look forward to proving you wrong.”

Morgan hailed his release, too.

In response to a request for comment, a Bureau of Prisons spokesperson indicated that while Lichtenstein is out of prison, he remains in a form of confinement.

“Ilya Lichtenstein is currently in the custody of the Bureau of Prisons (BOP),” said the spokesperson, Randilee Giamusso. “Mr. Lichtenstein transferred from the Federal Correctional Institution (FCI) Allenwood Low on December 30, 2025, to community confinement overseen by the BOP’s Sacramento Residential Reentry Management (RRM) Office.

“Community confinement means the individual is in either home confinement or a Residential Reentry Center (RRC, or halfway house). He has a projected release date of January 25, 2026,” Giamusso said.

The Justice Department did not respond to a request for comment. The FBI declined to comment. A U.S. official told CNBC that Lichtenstein “has served significant time on his sentence and is currently on home confinement consistent with statute and Bureau of Prisons policies.”

Updated 1/5/26: to include comment from the Bureau of Prisons.

NYC couple pleaded guilty to money laundering in Bitfinex hack

Ilya Lichtenstein also admitted, for the first time publicly, to carrying out the hack that resulted in a $3.6 billion seizure by the Department of Justice.

‘Razzlekhan’ released on bond, husband detained ahead of cryptocurrency laundering trial

New York couple accused of laundering cryptocurrency from $4.5 billion Bitfinex hack

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