Ilya Lichtenstein Bitfinex Hack Prison Release 2026: The Trump Reform Impact

One of the most notorious figures in crypto-crime history is a free man again. Ilya Lichtenstein, the hacker who orchestrated the Bitfinex heist involving 120,000 bitcoin, has been released from prison early. He's crediting his freedom to the First Step Act, a bipartisan prison-reform law signed by President Donald Trump.

How the First Step Act Shortened a 5-Year Sentence

Lichtenstein was originally sentenced in November 2024 to 5 years behind bars. Despite the massive scale of the multi-billion dollar hack, his cooperation with authorities and the provisions of the First Step Act allowed for a significantly accelerated release. By late January 2, 2026, the hacker confirmed on social media that he's officially out of federal custody and currently under home confinement.

The First Step Act aims to reduce recidivism by offering early release incentives for low-risk inmates who complete rehabilitation programs. Lichtenstein publicly thanked "Papa Trump" for the legislation, signaling a clear connection between the administration's policies and his own legal outcome.

The 'Crocodile of Wall Street' Reunion

Lichtenstein's wife and partner in crime, Heather Morgan—also known as the rapper 'Razzlekhan'—celebrated his return. Morgan, who received an 18-month sentence for laundering the stolen Bitcoin, was also released early in October 2025. The couple, once dubbed the 'Bonnie and Clyde of Crypto,' are now reunited after four years apart, sparking intense debate over whether justice was truly served.

Trump's Pro-Crypto Legal Landscape

This release follows a string of crypto-friendly moves by the Trump administration. Since returning to office, Trump has pardoned Silk Road founder Ross Ulbricht and Binance's Changpeng Zhao (CZ). The administration's lenient stance toward crypto pioneers and even some criminals suggests a radical shift in how the U.S. government views digital asset regulation and enforcement.