• The Bitfinex crypto hack resulted in the theft of 120,000 Bitcoin
• Ilya Lichtenstein used a series of sophisticated methods to hide the stolen funds between 2016 and 2022
• He told his wife and co-conspirator about the hack in 2020 who then helped him to hide the stolen assets

US prosecutors have told a judge that the mastermind behind the Bitfinex exchange hack should receive five years in prison.

Ilya Lichtenstein, who pleaded guilty last year after stealing 120,000 Bitcoin, was arrested in 2022. His wife and co-conspirator Heather Morgan was also taken into custody, in connection to the 2016 Bitfinex crypto hack. During their arrest, police seized Bitcoin worth around $71 million at the time of the hack.

According to Bloomberg, a court filing was submitted to the US District Court of Columbia, US prosecutors say Lichtenstein should receive a longer sentence than Morgan, also known as rapper Razzlekhan.

Last week, federal prosecutors recommended that Morgan receive an 18-month prison sentence given her “substantial assistance” in the case and the fact that she didn’t know her husband had hacked into Bitfinex.

Prosecutors argued that a stronger sentence for Lichtenstein would help deter young cybercriminals from attempting the same thing. According to them, this online activity is “normalized in a way that trivializes the impact on the victims.”

By giving a tougher sentence, prosecutors believe it will “help to break this cycle.”

Sole responsibility for the hack

While it was initially believed that both of them were involved in the exchange’s hack, Lichtenstein was identified as the primary person responsible.

It was only in 2020 that Morgan found out about what her husband had done and admitted to helping him hide the stolen crypto. Following the hack, Lichtenstein transferred around 120,000 Bitcoin into a self-custody wallet under his control.

Over the next few years, he withdrew 25,000 Bitcoin, laundering the stolen funds through darknet markets, non-compliant virtual currency exchanges, and mixers and tumblers, including Bitcoin Fog, Helix, and ChipMixer.

With Morgan’s help, the pair used the stolen funds to buy nonfungible tokens (NFTs), gold, and Walmart gift cards.

Prosecutors have not pushed the judge to give Lichtenstein the maximum sentence due to his assistance in other criminal cases. For instance, in February, Lichtenstein testified as a government witness in a money-laundering trial against Bitcoin Fog.

The pair are scheduled to be sentenced in November.

Elon Musk has compared the Federal Reserve with a rule from a Monopoly game, stating that, just like the game bank, the FED can never go bankrupt, and it can always emit more money. This analogy has led to discussions on the subject of monetary policy, particularly with the forecasted resumption of quantitative easing (QE).

At the same time, analysts such as Michaël van de Poppe and Peter Schiff are recommending buying Bitcoin, gold, and silver, as they expect the upcoming economic crisis and increasing U. S. debt.

Elon Musk’s Monopoly Analogy and the FED

Elon Musk’s tweet likening the ability of the Federal Reserve to create money to the rules of the Monopoly game has initiated quite a discussion. According to the Monopoly rule, in case the bank runs out of cash, players can make use of slips of paper to continue transactions, thus creating a sense of limitless ability to generate money

This analogy points to the fears of the FED monetary policy, particularly against the backdrop of persisting economic problems. Critics claim that printing money without constraint can result in inflation and currency devaluation.

The Federal Reserve has employed quantitative easing (QE) in the past, in which it acquires securities to pump money into the economy, which some worry could produce outcomes similar to those suggested by the Monopoly rule.

Buy #Bitcoin.
Buy Gold.
Buy Silver.

They’ll start QE in the next months again. https://t.co/B9wAd3mN1W

— Michaël van de Poppe (@CryptoMichNL) May 11, 2024

Reacting to Musk’s tweet, financial analyst Michaël van de Poppe recommended that investors buy Bitcoin, silver, and gold, anticipating that QE will be resumed. Van de Poppe’s tweet stated: “Purchase #Bitcoin. Buy Gold. Buy Silver. They will start QE again in a few months. ”

Economist Weighs In on Bitcoin

Economist Peter Schiff, too, predicts an explosive rise in gold and silver prices and possibly become “the biggest precious metals bull market in history. ” A long-time advocate of gold, Schiff says that today’s charts and fundamentals favor a significant increase in gold and silver prices.

He, however, continues to be negative about Bitcoin, calling it “dead money” and mentioning the likelihood of negative side effects of outflows from Bitcoin ETFs.

#Gold, #silver and the mining stocks look like they are all ready to explode higher. Both the charts and the fundamentals have never looked better. #Bitcoin is dead money. Sell before it’s buried. Take advantage of what could be the biggest precious metals bull market in history.

— Peter Schiff (@PeterSchiff) May 9, 2024

Schiff’s alerts spill over to the U.S. Economy at large. He raises issues related to consumer confidence, inflation, and interest rates, claiming that the FED’s policies might become counterproductive, fostering additional economic instability. He forecasts that recessionary pressures might push the Fed to lower rates and start QE again, leading to inflation worsening.

Rising U.S. Debt and Investor Behavior

The levels of U.S. debt have been increasing, which is why investors have been moving towards Bitcoin and gold as hedges against inflation. A recent report indicated that the country’s fiscal path concerns have increased investments in these assets. The U.S. budget deficit reached $1.7 trillion in fiscal year 2023 and is projected to hit $2.6 trillion by 2034. The debt held by the public is on track to reach a record 106% of GDP by 2028.

Besides, the recent approval by the SEC of spot Bitcoin ETFs has increased demand for Bitcoin. After its launch, the price of Bitcoin moved over $73,000 due to new investment possibilities. The expectation of the halving event of Bitcoin, which usually precedes price surges, has added to the interest, with analysts predicting a surge above $100k.

Read Also: Dogecoin and Shiba Inu Await Breakout for Over 100% Rally

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Kelvin is a distinguished writer specializing in crypto and finance, backed by a Bachelor’s in Actuarial Science. Recognized for incisive analysis and insightful content, he has an adept command of English and excels at thorough research and timely delivery.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.