What happened
Bitfinex hacker Ilya Lichtenstein claims early release under the First Step Act after serving just over one year of a five-year sentence for his role in the 2016 Bitfinex cryptocurrency exchange hack that resulted in the theft of nearly 120,000 bitcoin. On January 2–3, 2026, Lichtenstein posted on X that he was released early under the First Step Act, a 2018 criminal justice reform law signed by former President Donald Trump that allows earned time credits and rehabilitation-based sentence reductions. Lichtenstein reiterated his intent to “make a positive impact in cybersecurity,” while authorities say his release aligns with Bureau of Prisons policies on earned credits. His co-conspirator and wife, Heather Morgan (“Razzlekhan”), was also released early after serving a shorter sentence.
Who is affected
Ilya Lichtenstein and Heather Morgan are directly affected as recipients of early release. The broader cryptocurrency and cybersecurity communities are watching this development closely, as it intersects legal outcomes with high-profile crypto crime cases and potential post-release roles in security.
Why CISOs should care
This event highlights how legal interpretations of cybercrime and rehabilitation policies influence perceptions of accountability in tech-centric offenses. CISOs should monitor how criminal justice reforms intersect with deterrence and rehabilitation narratives for cybercrime actors as part of broader risk and policy landscapes.
3 practical actions
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Monitor Legal Trends: Track how sentencing reforms affect cybercrime prosecution and deterrence.
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Assess Insider Risk: Consider how experiences of convicted actors might influence cyber workforce and rehiring policies.
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Engage Policy Teams: Work with legal and government relations to understand implications for industry standards and enforcement.