Bitfinex Hacker's First Public Statement Since Arrest

Ilya Lichtenstein, the hacker behind the 2016 Bitfinex breach, has issued his first public statement since his 2022 arrest and subsequent five-year prison sentence.

In a post on X (formerly known as Twitter), Lichtenstein reiterated his courtroom admissions, confessing to hacking Bitfinex and laundering thousands of Bitcoin.

He emphasized his desire to take full responsibility, shielding his wife, Heather Morgan, who also received an 18-month prison sentence for her role in laundering the stolen funds:

“I knew what I was doing was wrong and did it anyway because I didn't care, I didn’t care about anyone else except myself."

He added:

“I planned and executed the Bitfinex heist entirely by myself, and I am the one who bears full responsibility for everything that has happened […] [My wife] was in no way involved in the hack itself. She didn't even know about it for years.”

With bags under his eyes, Lichtenstein said:

"For the past three years, I have worked hard to account for and return all assets down to the last satoshi, as required by my plea agreement, and I will continue to do so."

Lichtenstein provided an update on restitution efforts for the stolen Bitcoin while Morgan, known by her rapper alias "Razzlekhan," has resumed social media activity.

She has posted updates about her house arrest conditions on YouTube and taken Cameo video requests from supporters.

Morgan's prison term is expected to begin next month.

A restitution hearing scheduled for 21 February, will decide whether the recovered funds are returned to Bitfinex or distributed among its affected customers.

The case continues to raise questions about accountability and justice in one of the largest crypto heists to date.

Netflix Quick to Jump in on the Hype

The high-profile case captured the attention of Netflix, which produced a documentary series spotlighting the husband-and-wife duo.

In response, Lichtenstein has publicly refuted Netflix's implications that his father played any role in the events surrounding the Bitfinex breach:

“My dad is no hacker, he doesn't even know how to use Instagram.”

In the video recorded from prison during a remote visit with his wife, he expressed:

"I offer my sincerest apologies to Bitfinex for all the stress that I have caused them. I knew what I was doing was wrong and I did it anyway because I didn't care ... I look back at the person I was then, and I hate myself. I hate myself."

Brand Over Accountability? Morgan's Bold Return

Prosecutors revealed that Morgan became aware of the Bitfinex hack years after it occurred and was later recruited by her husband to launder the stolen Bitcoin.

Lichtenstein said in the video:

"In many ways, my wife ... is just another victim of my bad decisions."

Lichtenstein recently urged his 1,167 X followers to distinguish between his actions and those of his wife, though his motives for doing so remain unclear.

Following her sentencing, Morgan announced plans to pursue "creative and other endeavors," launching a Cameo channel on 13 December where she charges $125 for personalised videos.

Embracing her notoriety, Morgan refers to herself as "crypto's favorite felon" and the wife of a "notorious hacker" while soliciting funds on the platform.

Referring to the video her husband released:

"It's nice to begin to have the public record surrounding our case set straight. You would think that would have happened after our sentencing memos got filed, but that really hasn't been the case. There are so many myths that I look forward to debunking when we tell the real story.”

She added:

"Despite everything you've read, my Razzlekhan persona never had anything to do with this case, besides the government mentioning it in their charging documents. I created Razzlekhan years before I ever knew my husband had hacked Bitfinex."

Morgan continued:

“While our criminal case was open, I was unable to speak publicly or tell my story. This also meant I could not publish any articles or release any new artworks or songs the last three years. Now that the case is over, I look forward to freely expressing myself creatively again. ... I am eager to tell the story of what really happened.”

Morgan, who pled guilty to conspiracy charges for money laundering and defrauding the United States, is scheduled to report to the Federal Correctional Institution in Danbury, Connecticut, no earlier than 24 January.

The facility, which houses both male and female inmates, is also where former Alameda Research CEO Caroline Ellison is serving a two-year sentence for her involvement in the collapse of crypto exchange FTX.

Bitfinex Hacker Details Life After Prison

Lichtenstein, seeking redemption in court, expressed a desire to dedicate his post-incarceration career to combating cybercrime.

In Tuesday's video, Lichtenstein reiterated that pledge:

"When I am released from prison ... I plan to dedicate myself to working in the cybersecurity industry. I know the cyber threats that we face and I know how to stop them."

The 2016 Bitfinex hack, in which he stole Bitcoin valued at $70 million at the time, now represents a staggering $12 billion in today's market.

While a Netflix documentary suggests that a significant portion of the stolen funds remains unaccounted for, Lichtenstein's attorney firmly denies this claim, asserting that all funds have been traced.

The lawyer, Samson Enzer of Cahill Gordon & Reindel LLP, explained:

“With significant help from Mr. Lichtenstein, the government has recovered nearly all of the assets stolen during the 2016 Bitfinex hack. In total, approximately 114,601 BTC (representing 96% of the approximately 119,754 BTC taken in the hack) were recovered, as well as 29 additional assets with substantial value.”