Bitfinex Hacker Ilya Lichtenstein Cites Trump's First Step Act for Early Prison Release

Ilya Lichtenstein, the individual responsible for the 2016 Bitfinex hack, has been granted early release from federal prison. The hacker, who stole nearly 120,000 Bitcoin, cited the First Step Act as the reason for his early release.

The First Step Act, a bipartisan criminal justice reform law signed by President Donald Trump in 2018, allows for early release through earned credits for rehabilitation and program participation according to reports. Lichtenstein stated that his release was made possible by this law, and he expressed a commitment to contributing positively to cybersecurity according to data.

The release of Lichtenstein is part of a broader trend of early releases and pardons for individuals involved in the cryptocurrency industry under the Trump administration according to analysis. This includes the recent pardons of Ross Ulbricht and Changpeng Zhao, the founder of Binance according to reports.

Why Did This Happen?

Lichtenstein was sentenced to five years in prison in November 2024 for his role in the Bitfinex hack and subsequent money laundering conspiracy. The release came after he served part of his sentence and participated in prison programs that qualify for earned credits under the First Step Act according to data.

The Trump administration confirmed that Lichtenstein had served a significant portion of his sentence and was on home confinement in line with Bureau of Prisons policies according to reports. This early release is part of the broader application of the First Step Act, which aims to reduce recidivism through rehabilitation according to experts.

How Did Markets React?

The early release of Lichtenstein did not immediately trigger significant market reactions. However, it comes at a time when the crypto market is navigating regulatory changes and macroeconomic pressures according to analysis. The Trump administration has been seen as a regulatory ally for the crypto industry, with major legislative wins expected in 2026 according to reports.

The Bybit hack in February 2025 had a notable impact on the industry, prompting global regulators to reassess crypto security protocols according to reports. The Bitfinex case is often compared to these incidents, as both highlight the need for robust security measures and regulatory oversight according to experts.

What Are Analysts Watching Next?

Legal scholars have noted that the First Step Act was applied to Lichtenstein because his crime was classified as non-violent according to analysis. This classification allows for the use of earned credits for rehabilitation, which is a significant shift in federal sentencing policy according to experts.

Blockchain forensics experts have highlighted the investigative success in the Bitfinex case, emphasizing the recovery of $4.5 billion in stolen funds as a key achievement according to reports. The recovery of assets remains a priority for law enforcement in digital asset crimes according to experts.

The early release of Lichtenstein and his wife, Heather Morgan, has also drawn attention to the broader implications for future prosecutions of crypto crimes according to experts. Legal experts believe that the precedents set in the Bitfinex case will continue to influence how digital asset theft is handled in the future according to analysis.

The Trump administration's approach to crypto-related crimes has been characterized by pardons and early releases for high-profile figures in the industry according to reports. This trend may continue, especially with upcoming legislative hearings and potential changes to the regulatory framework according to analysis.

As the crypto industry continues to evolve, the application of the First Step Act to cases involving digital assets will be closely monitored according to experts. The balance between punishment and rehabilitation in the context of high-stakes financial crimes remains a topic of debate among legal experts and industry stakeholders according to analysis.