Ilya Lichtenstein, the Russian-U.S. dual national who orchestrated one of the largest cryptocurrency thefts in history, has been released from prison years ahead of schedule, citing sentencing relief made possible under the First Step Act signed by President Donald Trump.
Late Thursday, Lichtenstein announced his early release in a post on his verified X account, saying the bipartisan prison reform law had allowed him to leave federal custody before completing his five-year sentence.
“Thanks to President Trump’s First Step Act, I have been released from prison early,” the post read. “I remain committed to making a positive impact in cybersecurity as soon as I can.”
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A Trump administration official confirmed on Friday that Lichtenstein has not been fully discharged from federal supervision but is now on home confinement, in line with Bureau of Prisons policy and statutory guidelines.
“He has served significant time on his sentence and is currently on home confinement consistent with statute and Bureau of Prisons policies,” the official said.
Lichtenstein pleaded guilty in 2023 to conspiring to launder cryptocurrency stolen during the 2016 hack of Bitfinex, one of the world’s largest digital asset exchanges. Nearly 120,000 bitcoin were siphoned from the platform, a haul that at current prices is worth several billion dollars.
At the time of the hack, the theft represented roughly 36% of all bitcoin stolen globally that year. The crime stunned the crypto industry and exposed deep vulnerabilities in exchange security during bitcoin’s early years.
Despite the scale of the theft, Lichtenstein was not arrested until 2022, after U.S. authorities traced the laundering trail across thousands of blockchain transactions and seized more than 94,000 bitcoin — the largest financial seizure in Justice Department history.
In November 2024, a federal judge sentenced Lichtenstein to five years in prison, factoring in credit for time served since his arrest. Prosecutors emphasized that while he was not charged with executing the original Bitfinex breach itself, he played a central role in laundering the stolen assets through darknet markets, shell companies, and crypto exchanges.
Early Release and Legal Ambiguity
As of Friday morning, the federal inmate locator still listed Lichtenstein with a scheduled release date of February 9, underscoring the murky mechanics of sentence reductions under the First Step Act, according to CNBC.
The First Step Act, signed into law in December 2018 during Trump’s first term, created incentives for inmates to earn time credits through rehabilitation programs and good conduct. Eligible prisoners can transition into supervised release or home confinement earlier than originally scheduled.
There has been no indication that Trump or the White House intervened directly in Lichtenstein’s case. Still, the optics of the release are drawing attention because it follows a string of high-profile clemency decisions involving crypto figures since Trump returned to office.
Heather Morgan Released Earlier
Lichtenstein’s wife, Heather Morgan, also benefited from early release. Morgan, who pleaded guilty to helping launder the stolen bitcoin, was sentenced to 18 months in prison and began serving her term in February.
In October, she revealed on social media that she had been released ahead of schedule, also thanking Trump. In a video posted online, Morgan — a rapper who performs under the name “Razzlekhan” — credited the president for shortening her sentence.
“The best New Year’s present I could get was finally having my husband home after four years of being apart,” Morgan wrote on X on Thursday night, posting a photo of the couple together.
A Crypto-Friendly White House
Lichtenstein’s release lands amid a broader shift in Washington’s posture toward cryptocurrency enforcement under Trump’s second term.
Just one day after his inauguration, Trump pardoned Ross Ulbricht, the founder of Silk Road, the darknet marketplace synonymous with early bitcoin-based crime. In October, Trump also pardoned Changpeng Zhao, the founder of Binance, who had pleaded guilty to violating U.S. anti-money laundering laws.
The moves have reinforced Trump’s reputation as the most crypto-friendly president in U.S. history, even as regulators and prosecutors continue to warn that digital assets remain a favored tool for money laundering, sanctions evasion, and cybercrime.
Implications for Cybercrime Deterrence
Lichtenstein’s early release is already raising questions inside legal and cybersecurity circles about deterrence. Prosecutors spent years unraveling the Bitfinex laundering operation, presenting the case as proof that blockchain transactions are traceable and that crypto crimes carry serious consequences.
It is believed that the outcome — home confinement after serving only part of a five-year sentence for laundering billions of dollars — risks sending a mixed message, particularly as crypto-related prosecutions increase globally.
Lichtenstein, for his part, says he intends to pivot into cybersecurity work.