The man behind the fame hacking of the Bitfinex cryptocurrency exchange who stole billions of dollars worth of digital coins could spend the next five years in state prison after the verdict against him in November.
Because of his role in the robbery, state lawyers asked a federal court in Washington to impose a harsher sentence on Ilya Lichtenstein.
Lichtenstein, The Mastermind Behind the Heist
Estimates suggest that approximately $8 billion worth of Bitcoin was stolen from cryptocurrency exchange Bitfinex. This well-planned illegal activity highlighted the unique risks associated with cryptocurrency, highlighting the importance of cybersecurity in this emerging field.
The burglary incident was a turning point that prompted players to make a decision cryptocurrency market to talk about security measures, regulatory scrutiny and the future of exchanges.
If Lichtenstein receives a five-year sentence, it will be a key step in solving the cybercrime issues currently affecting the crypto space.
Moreover, the outcome of the case may well have an impact outside the courtroom. This could highlight the role of accountability in the cryptocurrency landscape in dissuading people from similar illegal activities in the future.
Hacking incident
In August 2016, prominent cryptocurrency exchange Bitfinex announced that its platform had been hacked, leading to the loss of billions of dollars in user data value. Bitcoin.
Reports indicate that Lichtenstein exploited a vulnerability in the exchange’s technology to access the wallets of Bitfinex traders with his associates.
Total crypto market cap at $2.27 trillion on the daily chart: TradingView.com
From thousands of Bitfinex users, Lichtenstein, his wife and another accomplicesuccessfully looted approximately 120,000 Bitcoins.
Given that Bitfinex is one of the major participants in the virtual asset market, the degree of hacking has sent shockwaves across the digital currency scene.
After the incident was announced, the value of Bitcoin dropped noticeably. The entire crypto space felt uneasy as it raised the question of whether commercial websites had sufficient security mechanisms.
Lichtenstein pleaded guilty in 2023
Last year, Lichtenstein pleaded guilty to involvement in the 2016 Bitfinex cryptocurrency heist. According to investigators, they found a blockchain trace leading to Lichtenstein’s wallet, which raises suspicions about his involvement in the crime.
It took state prosecutors and law enforcement officials six years to discover the stolen money. They determined that most of the money was still in Lichtenstein’s wallet.
It took seven years after the cryptocurrency heist before Lichtenstein pleaded guilty to orchestrating the 2016 cyber attack on Bitfinex. Lichtenstein and his wife are still awaiting sentencing for their crime.
The consequences of the crime
The Bitfinex breach raised the stakes in the cryptocurrency space and led to increased regulatory attention from international governments.
Following the hack, there were calls for tighter restrictions as regulatory organizations began to focus more on the security and operational procedures of cryptocurrency exchanges.
Featured image from signature-vegetale.com, chart from TradingView
