In 2016, Ilya Lichtenstein transferred nearly 120,000 bitcoins from Bitfinex via keyboard, worth approximately $71 million at the time; ten years later, this asset had ballooned to $11 billion. He has now been transferred from federal prison to home detention, not because of a presidential pardon, but because of the commutation points system provided by the First Step Act signed by Trump in 2018. This has led to an unexpected legal outcome in this landmark heist.
How can home confinement become a reality?
Lichtenstein was originally sentenced to five years in prison in November 2024, but was transferred to home detention after serving only about 14 months. He posted a message on the X platform thanking Trump and saying:
Thank you, President Trump, for the First Step Act… To those who hate me, I look forward to proving you wrong.
His wife, rapper Heather Morgan (stage name "Razzlekhan"), was released in October 2025. The couple turned the criminal case into a social media stage, with Morgan even referring to Trump as "Papa Trump" and saying that her husband's return home was "the best New Year's gift."
In 2018, the First Step Act passed with bipartisan support during Trump's first term. The act allows non-violent offenders to earn "good time points" through education, vocational training, or other rehabilitation programs, which can be credited against up to 54 days of imprisonment per year, allowing eligible offenders to be transferred to home detention early. White House officials stated that this release was carried out entirely by the Bureau of Prisons in accordance with existing regulations and was not a presidential pardon.
Originally intended to alleviate excessive incarceration and correct systemic inequality, the bill now benefits high-tech criminals who steal billions of dollars, demonstrating that the current sentencing structure may be unbalanced when faced with large-scale crypto crimes.
Billions in embezzled funds and the price of Bitcoin
The US government has recovered most of the stolen Bitcoin, but with Bitcoin (BTC) currently trading at $93,958, the asset is still worth tens of billions of dollars. Lichtenstein has stated he will dedicate himself to cybersecurity, turning his hacking experience into career capital, while Morgan is reportedly preparing a new single. The two are attempting to transform legal stigma into personal branding, further highlighting the intertwining of the crypto world and the internet economy.
This incident has sparked heated debate within the crypto community and investment circles. Supporters of judicial reform emphasize "equal treatment before the law," arguing that Lichtenstein was merely exploiting existing legal mechanisms; opposing investors question whether "the cost of crime seems unbelievably low for anyone who understands code." The $11 billion in illicit gains, compared to over a year in prison, is seen as a textbook example of "the asymmetry between punishment and reward."
The incident also exposed a gap between regulation and sentencing: hackers can transfer huge sums of money on the global blockchain, but sentencing still follows a traditional framework, making it difficult to accurately account for the social risks of tech crimes. Legal scholars point out that without a dedicated chapter on the theft of large amounts of digital assets, similar mitigation clauses may continue to be controversial.
In today's world, where technology, the judiciary, and politics intertwine, Lichtenstein's early release serves as a mirror, reflecting the tension between the initial intentions of prison reform and the reality of high-tech financial crime. The soaring price of Bitcoin, institutionalized sentence reductions, and community manipulation have woven together a new narrative, leaving significant questions about how the judicial system should address digital economic crimes. The case has concluded, but discussions about fair sentencing, cybersecurity, and legal revisions have only just begun.
