Key Notes
- Ilya Lichtenstein, who laundered almost 120,000 Bitcoin from the 2016 Bitfinex hack, has been released from prison.
- He attributed his early release to the First Step Act, a bipartisan bill signed by President Trump in 2018.
- Lichtenstein was originally sentenced to five years and his wife Heather Morgan received 18 months.
Ilya Lichtenstein, the hacker behind the 2016 Bitfinex breach that saw 119,754 Bitcoin
BTC
$89 405
24h volatility:
1.8%
Market cap:
$1.79 T
Vol. 24h:
$30.65 B
stolen, has been released from prison.
Lichtenstein attributed his early release to the First Step Act, a criminal justice reform bill signed into law by President Donald Trump in 2018.
The release closes a chapter on one of crypto’s most notorious cases.
Thanks to President Trump’s First Step Act, I have been released from prison early.
I remain committed to making a positive impact in cybersecurity as soon as I can.To the supporters, thank you for everything.
To the haters, I look forward to proving you wrong.— Ilya Lichtenstein (@cipherstein) January 2, 2026
How Trump’s Policies Affected the Lichtenstein Case
Lichtenstein and his wife, Heather “Razzlekhan” Morgan, were arrested in February 2022 for laundering the stolen crypto, valued at $4.5 billion at the time of their arrest and over $10 billion today.
Bitcoin (BTC) is currently trading around $89,447.07.
Lichtenstein was sentenced in November 2024 to five years in prison after pleading guilty to conspiracy to commit money laundering and admitting to executing the hack himself.
Morgan received a lesser 18-month sentence for her role and was released in October after serving approximately eight months.
The First Step Act allows eligible federal inmates to earn time credits for participating in recidivism reduction programs, which can lead to earlier placement in pre-release custody like home confinement.
The law was a bipartisan effort aimed at reducing the federal prison population.
Trump has taken various actions seen as favorable to cryptocurrency figures, citing that he was told some cases were part of a “witch hunt” under the Biden administration.
He pardoned Binance co-founder Changpeng Zhao (CZ) in October 2025.
However, in a CBS News 60 Minutes interview aired on Nov. 2, Trump said he didn’t know Zhao and didn’t recall ever meeting him, while the White House defended the pardon and denied it was influenced by Trump’s personal financial interests.
Crypto Markets Watch as Lichtenstein Gets Early Release
Lichtenstein’s early release, and his pointed crediting of a specific political act, sends a complex signal to the market.
For institutional compliance desks, it underscores the nuanced reality of sentencing for crypto-related financial crime in the U.S.
While the absolute sentence was five years, the actual time served is substantially less. This outcome will be factored into risk models concerning financial crime enforcement.
The politicization of the release, however minor, also injects a new variable into the regulatory landscape, suggesting that outcomes can be influenced by broader political currents beyond the specifics of a given case.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Hamza is an experienced crypto editor/writer with a deep understanding of blockchain technology, cryptocurrency markets, and digital finance. He is passionate about making complex topics accessible and helping readers navigate the fast-evolving world of crypto.
