The U.S. Department of Justice (DOJ) has unsealed charges against two Russian nationals, Alexey Bilyuchenko and Aleksandr Verner, in connection with the 2011 hacking incident involving Mt. Gox, a prominent bitcoin exchange at the time.
The charges accuse Bilyuchenko and Verner of engaging in a conspiracy to commit money laundering.
Old charges brought to light
Court documents reveal that two Russian nationals, Alexey Bilyuchenko, 43, and Aleksandr Verner, 29, have been charged with conspiracy to launder around 647,000 bitcoins following their involvement in the Mt. Gox hack.
In addition, Bilyuchenko faces an additional charge for conspiring with Alexander Vinnik to operate BTC-e between 2011 and 2017. The charges highlight the alleged connections between the individuals and the illicit activities surrounding the prominent bitcoin exchange and cryptocurrency platform.
“As alleged in the indictments, starting in 2011, Bilyuchenko and Verner stole a massive amount of cryptocurrency from Mt. Gox, contributing to the exchange’s ultimate insolvency. Armed with the ill-gotten gains from Mt. Gox, Bilyuchenko allegedly went on to help set up the notorious BTC-e virtual currency exchange, which laundered funds for cyber criminals worldwide.”
Kenneth A. Polite, Jr., assistant attorney general, U.S. Justice Department Criminal Division.
Meanwhile, court documents unsealed in the Southern District of New York reveal that Bilyuchenko, Aleksandr Verner, and others allegedly gained unauthorized access to the server housing the cryptocurrency wallets of Mt. Gox, the largest bitcoin exchange at the time, which had numerous users globally.
The wallets contained customers’ bitcoins and the associated private keys necessary for transferring the cryptocurrency.
As part of their money laundering scheme, Alexey Bilyuchenko, Aleksandr Verner, and their co-conspirators are accused of engaging in fraudulent activities involving an advertising contract in April 2012.
The contract purported to provide advertising services to a bitcoin brokerage service located in the Southern District of New York.
Under the guise of this contract, Bilyuchenko and Verner allegedly requested the owner and operator of the New York bitcoin broker to initiate substantial wire transfers into offshore bank accounts, including those held by shell corporations controlled by the defendants.
“The FBI will continue to work with our U.S. government and international partners to relentlessly pursue and disrupt malicious cyber actors wherever they may reside. When cyber criminals engage in fraudulent activity, such as hacking and illicitly operating cryptocurrency exchanges, it is critical that we impose cost on the bad actors and ensure they face justice.”
Bryan Vorndran, assistant director of the FBI’s Cyber Division.
The elaborate scheme aimed to conceal and convert the stolen bitcoins from the Mt. Gox hacking incident.
Catching bad actors
Taken together, the reopening of this case underscores the link between illicit activities, cybercrime, and the operation of virtual currency exchanges, serving as a reminder of the ongoing challenges related to security and the need for robust measures to safeguard digital assets in the cryptocurrency ecosystem.
