Bitfinex hacker testifies in Bitcoin Fog trial as government witness
Ilya Lichtenstein has testified against the alleged operator of crypto mixer Bitcoin Fog, which was shutdown in 2021.
Convicted Bitfinex hacker Ilya Lichtenstein has become a key government witness in a jury trial involving the alleged operator of crypto mixer Bitcoin Fog Roman Sterlingov, Bloomberg News reported on Feb. 27.
US prosecutors arrested and charged Sterlingov in April 2021 over allegations that the mixer helped launder 1.2 million BTC — worth $335 million at the time — linked to illicit activities on the dark web.
He is currently facing a jury trial over criminal charges.
Prosecutors arrested Lichtenstein and his wife, Heather Morgan, in February 2022. He was convicted of the theft after entering a guilty plea in August 2023. The couple conspired to launder $4.5 billion in Bitcoin they had stolen from the crypto exchange Bitfinex starting in 2016.
Criminal turned witness
According to the report, Lichtenstein testified that he had used Bitcoin Fog roughly ten times to launder some of the stolen funds. However, he eventually stopped using it in favor of a more preferable mixer called Helix.
Authorities shut down both mixers in 2021; Helix’s creator also pleaded guilty that year.
Lichtenstein additionally testified that he did not use Bitcoin Fog and other coin mixers for most of his laundering activities. Instead, he often deposited money to crypto exchange accounts registered to identities he had purchased on the dark web.
The Bitfinex hacker told the jury that he had never communicated with Sterlingov directly and did not know him. His testimony also revealed the reasons behind his decision to hack Bitfinex. Lichtenstein said:
“At the time, my business was struggling, and I was feeling very burnt out from it.”
Sterlingov faces multiple charges
A DOJ statement indicates that Sterlingov faces several charges, including money laundering, operating an unlicensed money-transmitting business, and money transmission without a license in the District of Columbia.
Sterlingov has vehemently denied these charges and claims innocence. His lawyers have argued that no hard evidence — such as eyewitness testimony or server logs — links him to the crypto mixer.
As of Feb. 27, the trial is ongoing, and the jury has yet to issue a verdict.
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