Two Russian nationals have been charged in the United States with hacking the now-defunct cryptocurrency exchange, Mt. Gox, and conspiring to launder its proceeds. The individuals in question are Alexey Bilyuchenko, who is 43 years old, and Aleksandr Verner, who is 29. They have allegedly attempted to launder 647,000 bitcoins following their hack of the Mt. Gox exchange.
Alleged Attempted Laundering of Bitcoins
According to court documents, Bilyuchenko and Verner, along with other co-conspirators, hacked the Mt. Gox cryptocurrency exchange in September 2011. The exchange was at the time the largest Bitcoin exchange globally. Following the hack, the two accused individuals attempted to launder around 647,000 bitcoins from Mt. Gox.
Mt. Gox hack
The Mt. Gox hack has been one of the biggest crypto scandals in history. It was a Japan-based cryptocurrency exchange that was, at one point, responsible for around 70% of all Bitcoin transactions worldwide. However, in February of 2014, the exchange filed for bankruptcy after losing around 850,000 bitcoins belonging to its customers, as well as 200,000 bitcoins belonging to itself. The total worth of the lost bitcoins was around $473 million at the time, and it remains an unsolved mystery.
Unsealed indictment
The United States authorities unsealed an indictment on Friday, alleging that Bilyuchenko and Verner were two of the individuals responsible for the Mt. Gox hack. They are accused of laundering at least 300,000 of the stolen bitcoins. It is also worth noting that there were other co-conspirators involved in the hack.
Fraudulent advertising contract
One of the several schemes employed by the defendants to launder the stolen Bitcoins was through a fraudulent advertising contract. They are said to have entered into this agreement with a New York-based Bitcoin brokerage service.
Transfer of funds
As per the indictment, the service transferred more than $6.6 million into various offshore bank accounts at the request of Bilyuchenko, Verner, and their co-conspirators.
Additional Indictment
Additionally, the US authorities unsealed a second indictment on Friday. It revealed that BTC-e, a cryptocurrency exchange based in Russia, served more than one million users globally, processing billions of dollars’ worth of transactions. The indictment alleges that BTC-e was also used to launder proceeds from several high-profile criminal hacks, including the infamous Mt. Gox hack.
The charges against the two Russian nationals are among the latest in a series of high-profile cases against individuals involved in cryptocurrency crimes. The case also shows that even as the cryptocurrency industry continues to grow and mature, there is still a lot of work to be done when it comes to securing it and preventing fraudulent activities. While the Mt. Gox hack remains an unsolved mystery, the charges against the two individuals do provide some hope that those responsible will one day be brought to justice.