In a significant legal development, Ilya "Dutch" Lichtenstein, the convicted mastermind behind the 2016 Bitfinex hack that resulted in the theft of 119,754 Bitcoin, has been released from federal prison early under provisions of the First Step Act, a law signed by former President Donald Trump in 2018. The 35-year-old hacker acknowledged his release in a post on social media platform X, thanking the act and expressing a commitment to making a positive impact in cybersecurity.
The 2016 Bitfinex hack occurred on August 2nd, when attackers exploited a vulnerability in the exchange's multi-signature wallet service, initiating over 2,000 unauthorized transactions. At the time of the theft, the stolen Bitcoin was worth approximately $71 million. By the time of Lichtenstein's arrest in February 2022 alongside his wife, Heather Morgan, the value of the stolen funds had ballooned to a staggering $4.5 billion, marking one of the largest financial seizures in U.S. history.
Lichtenstein and Morgan were arrested after a multi-year investigation by Homeland Security Investigations (HSI) and the IRS Criminal Investigation Cyber Crimes Unit, which traced the movement of the stolen Bitcoin. A court-authorized search of their cloud storage accounts revealed private keys that accessed the wallets holding the stolen cryptocurrency. Both pleaded guilty to money laundering conspiracy, with Morgan facing an additional charge of conspiracy to defraud.
Lichtenstein was sentenced to five years in prison in November 2024. His early release was granted under the First Step Act, which allows federal prisoners to earn time credits for participating in rehabilitation and recidivism reduction programs. Morgan received an 18-month sentence and was released in October 2024 after serving approximately eight months. The couple's cooperation with U.S. authorities on other crypto prosecutions was cited as a factor in their reduced sentences.
This release is part of a broader pattern of leniency toward crypto offenders under the Trump administration. In March 2025, Trump pardoned BitMEX co-founders Arthur Hayes, Benjamin Delo, Samuel Reed, and employee Greg Dwyer, who had pleaded guilty to Bank Secrecy Act violations. Binance founder Changpeng "CZ" Zhao received a presidential pardon in October 2025 after pleading guilty to failing to implement an effective anti-money laundering program. Trump has also expressed willingness to consider pardoning Keonne Rodriguez, CEO of privacy-focused Bitcoin wallet Samourai.
The series of pardons has drawn significant political criticism. California Governor Gavin Newsom launched a state-backed website in December 2025 tracking what his office calls Trump's "top criminal cronies," referencing figures like CZ and Silk Road founder Ross Ulbricht. This has framed crypto clemency as part of a wider debate over corruption, public safety, and the role of digital assets in American politics.
