Bitcoin Hacker Ilya Lichtenstein Credits Trump-Era Law for Shock Early Prison Release

Convicted crypto criminal walks free years early—and he's thanking a controversial Trump administration policy for the shortcut.

The Legal Loophole That Unlocked His Cell

Ilya Lichtenstein, the hacker behind one of the largest cryptocurrency heists in history, didn't serve his full sentence. Instead, a law signed during Donald Trump's presidency paved his way out of federal prison ahead of schedule. The First Step Act, marketed as bipartisan criminal justice reform, is now being cited as the mechanism for his reduced time.

Justice System or Just a System?

The case spotlights the unintended consequences of well-intentioned legislation. Designed to reduce sentences for non-violent offenders, the law's application to a high-profile digital asset thief raises eyebrows across both the crypto and legal communities. It’s a stark reminder that in finance—traditional or digital—the rules are written, gamed, and sometimes rewritten by those who stand to benefit. Another day, another policy yielding a windfall for someone; Wall Street would be proud of the leverage.

Where does this leave the narrative of 'code is law'? When real-world statutes can override digital consequences, the promise of immutable blockchain justice hits a very human, very political wall. The crypto ecosystem watches, learns, and adapts—always calculating the next angle.

TLDR

• Ilya Lichtenstein served time for laundering 120,000 stolen Bitcoin from Bitfinex.
• He was released early due to Trump’s First Step Act prison reform law.
• His wife Heather Morgan also served time and was released early in 2023.
• Lichtenstein was sentenced in 2024 but got credit for time served since 2022.

Ilya Lichtenstein, the hacker behind one of the largest cryptocurrency thefts in history, has been released from prison earlier than expected. Convicted for laundering nearly 120,000 stolen bitcoin from Bitfinex, Lichtenstein credited his early release to the First Step Act, a Trump-era prison reform law. His wife and co-conspirator, Heather Morgan, also celebrated his return, calling it the best New Year’s gift after four years apart.

Early Release Linked to First Step Act

Ilya Lichtenstein, the convicted hacker behind the theft of nearly 120,000 bitcoin from crypto exchange Bitfinex, has announced his early release from prison. He credited the move to the First Step Act, a bipartisan criminal justice reform law signed by former President Donald Trump in 2018.

On Thursday evening, a post from Lichtenstein’s verified X (formerly Twitter) account read, “Thanks to President Trump’s First Step Act, I have been released from prison early.” A former TRUMP administration official confirmed to CNBC that Lichtenstein is now under home confinement, which complies with the law and Bureau of Prisons policy.

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

Lichtenstein, 38, was sentenced in November 2024 to five years in prison after pleading guilty to money laundering conspiracy and admitting to stealing billions of dollars in cryptocurrency. However, he had already spent time in custody following his February 2022 arrest, which was credited toward his sentence.

Lichtenstein’s Statement and Future Plans

Lichtenstein expressed intentions to return to the cybersecurity space in a responsible role. “I remain committed to making a positive impact in cybersecurity as soon as I can,” he wrote in his post.

He also addressed critics and supporters, stating, “To the supporters, thank you for everything. To the haters, I look forward to proving you wrong.” No official statement was made by his legal team at the time of publication.

A search on the federal inmate locator still listed his official release date as February 9. However, no confirmation has been provided by the Bureau of Prisons, and no further details on the conditions of his confinement were released.

Heather Morgan Also Released Early

Heather Morgan, Lichtenstein’s wife, was also involved in the laundering of the stolen crypto funds. She had pleaded guilty in the same case and was sentenced to 18 months in prison in 2024.

Morgan, who gained attention as a rapper under the name “Razzlekhan” and often referred to herself as the “Crocodile of Wall Street,” shared her husband’s post on social media. “The best New Year’s present I could get was finally having my husband home after 4 years of being apart,” she wrote, attaching a selfie of the couple.

She had entered prison in February 2024 but posted a video in October claiming she had been released early. In the clip, she thanked Trump and appeared in a bathtub saying, “It is very good to be back, and I want to give a shout out to Papa Trump for making my 18-month sentence shorter.”

Background on the Bitfinex Hack and Sentencing

The Bitfinex crypto theft in 2016 led to the disappearance of nearly 120,000 bitcoin, which WOULD now be worth over $4 billion. The couple was arrested in 2022 after investigators traced movement of the stolen funds and linked them to accounts controlled by Lichtenstein and Morgan.

Prosecutors said Lichtenstein was the primary hacker, while Morgan played a key role in laundering the stolen cryptocurrency through a complex network of transactions and shell companies. Both individuals agreed to forfeit a large portion of the seized assets.

Their sentencing attracted wide public interest due to the unusual mix of high-level crypto crime, pop culture elements, and social media presence by both parties.