Bitfinex Hacker Freed After One Year As Trump First Step Act Cuts Sentence Term

TLDR

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Ilya Lichtenstein was released after serving about one year of a five-year federal sentence.
The early release followed earned time credits allowed under the First Step Act.
Lichtenstein admitted to stealing nearly 120,000 BTC in the 2016 Bitfinex hack.
Most stolen bitcoin was later seized by US authorities after a long investigation.

A federal inmate tied to one of the largest crypto thefts is now free. After serving about one year in prison, the man behind the 2016 Bitfinex bitcoin hack has been released early. The decision follows sentence reductions allowed under President Donald Trump’s First Step Act. The move has drawn attention because of the scale of the crime, the value involved, and the broader debate around crypto-related enforcement.

Early Release After One Year in Federal Custody

Ilya Lichtenstein was released from US federal prison on January 2, 2026. He served roughly one year of a five-year sentence handed down in November 2024. The early release followed eligibility for earned time credits under the First Step Act. Federal records show he qualified through approved education and rehabilitation programs.

🚨BITFINEX HACKER RELEASED EARLY THANKS TO TRUMP
Ilya Lichtenstein, who stole nearly 120,000 BTC from Bitfinex in 2016, was released after serving 14 months of a five-year sentence due to Trump’s First Step Act. pic.twitter.com/pYE9LlNZC5
— Coin Bureau (@coinbureau) January 3, 2026

The law allows sentence reductions for non-violent federal offenders who meet set criteria. As a result, Lichtenstein was transferred out of custody well before his original release date. The case has gained attention due to the scale of the crime and its timing. His release comes during President Trump’s current term in office.

The 2016 Bitfinex Hack and Bitcoin Theft

Lichtenstein planned and executed the 2016 hack of Bitfinex. The breach resulted in the theft of nearly 120,000 bitcoin from the exchange. At current market prices, the stolen bitcoin is valued at over $10 billion. US authorities later seized most of the funds after tracing the transactions.

Court filings show he exploited internal authorization systems. He then carried out more than 2,000 unauthorized transactions over a short period. The stolen bitcoin was moved into wallets under his control. Investigators found no evidence of other hackers involved in the intrusion.

Money Laundering Case and Related Convictions

Lichtenstein pleaded guilty to conspiracy to commit money laundering. The charge focused on efforts to conceal and move the stolen bitcoin. The laundering activity continued for several years after the hack. Blockchain records helped investigators track the movement of funds.

His wife, Heather Morgan, was also convicted in the case. Prosecutors said she assisted in hiding the proceeds of the theft. Both cases were handled in federal court. This made them eligible for provisions under the First Step Act.

First Step Act and Broader Crypto Crime Context

The First Step Act was signed into law in 2018 by Donald Trump. It reformed federal sentencing rules and expanded earned time credits. The law applies only to federal inmates. It does not affect state-level convictions or sentences.

Lichtenstein’s release follows other high-profile crypto-related clemency actions. Ross Ulbricht was pardoned after more than ten years in prison. Changpeng Zhao also received a pardon after pleading guilty to AML violations. These decisions have shaped discussion within the US crypto sector.

Supporters of the law point to rehabilitation and sentence proportionality. Critics argue early releases may weaken deterrence for large-scale financial crimes. For now, Lichtenstein’s release stands as another example of how the First Step Act is applied. It also keeps attention on how US policy treats major crypto crime cases.