Crypto's 'Clyde' Gets 5 Years, Asks for Leniency for 'Bonnie'

A computer expert who stole bitcoin worth billions of dollars at current prices—and then spent years laundering the hacked cryptocurrency with help from his wife—was sentenced Thursday to five years in prison. Ilya Lichtenstein masterminded one of the largest-ever thefts from a virtual currency exchange before he and his wife, Heather Rhiannon Morgan, carried out an elaborate scheme to liquidate the stolen funds, according to federal prosecutors. The pair were dubbed the "Bonnie and Clyde" of cryptocurrency. The judge is scheduled to sentence Morgan on Monday. Lichtenstein pleaded with the judge to spare his wife from prison, blaming himself for her involvement, the AP reports.

• US District Judge Colleen Kollar-Kotelly told Lichtenstein that his theft was "meticulously planned" and not an impulsive act. "It's important to send a message that you can't commit these crimes with impunity, that there are consequences to them," she said.

• Lichtenstein, who gets credit for time served since his February 2022 arrest, expressed remorse for "wasting my talents on crime instead of a positive contribution to society." He said he hopes that he can apply his expertise to fight cybercrime when he gets out of prison. "I want to take full responsibility for my actions and make amends any way I can," he said.
• In August 2016, Lichtenstein hacked into a virtual currency exchange, Hong Kong-based Bitfinex, and stole approximately 120,000 bitcoin. It was worth approximately $71 million at the time and more than $7.6 billion at current market prices.
• Several months later, Lichtenstein began moving the stolen bitcoin in a string of complex transactions across a series of accounts and platforms. He enlisted his wife's help in cleaning the stolen funds. Lichtenstein initially solicited his wife's help in laundering the proceeds "without explaining exactly what he was doing," according to prosecutors. Morgan "was certainly a willing participant and bears full responsibility for her actions, but she was a lower-level participant," prosecutors wrote.

• The couple successfully laundered about 21% of the funds from Bitfinex. The laundered money was worth at least $14 million at 2016 prices. Its value would have exceeded $1 billion at the time of their 2022 arrest. "He became one of the greatest money launderers that the government has encountered in the cryptocurrency space," prosecutors wrote.
• Prosecutors recommended a five-year prison sentence for Lichtenstein, who pleaded guilty in August 2023 to one count of money laundering conspiracy. They recommended an 18-month prison sentence for Morgan, who pleaded guilty to the same charge.
• A prosecutor said Lichtenstein immediately began cooperating with federal authorities after his arrest, helping them with other cybercrime investigations. Over 96% of the stolen funds have been recovered, with help from Lichtenstein, according to defense attorney Samson Enzer. The "vast bulk" of the stolen money was never spent, the lawyer said. "This is not an evil person," Enzer argued. "This is a good person who made some very bad mistakes."

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