US prosecutors have fingered two Russian nationals as the masterminds behind the 2011 hack of Mt. Gox Mt. Gox Mt. Gox is the name of a Japan-based cryptocurrency exchange that was infamously hacked for 850,000 BTC worth roughly $450 million at the time in February of 2014. During July 2010 Mt. Gox formally launched Mt. Gox launched its exchange and price quoting service. It was subsequently sold to French developer Mark Karpelès in early 2011.Prior to its hacking, Mt. Gox suffered from other security vulnerabilities as early as June 2011. On 19 June, 2011, a security breach of the exchange caused the no Mt. Gox is the name of a Japan-based cryptocurrency exchange that was infamously hacked for 850,000 BTC worth roughly $450 million at the time in February of 2014. During July 2010 Mt. Gox formally launched Mt. Gox launched its exchange and price quoting service. It was subsequently sold to French developer Mark Karpelès in early 2011.Prior to its hacking, Mt. Gox suffered from other security vulnerabilities as early as June 2011. On 19 June, 2011, a security breach of the exchange caused the no Read this Term, the largest Bitcoin (BTC) exchange in the world at the time. The Department of Justice (DOJ) in an indictment unsealed on Friday charged Alexey Bilyuchenko, 43, and Aleksandr Verner, 29, with conspiracy to launder about 647,000 bitcoins following their hack of the exchange.

DOJ Indicts Two Russian Nationals

According to the prosecutors, between September 2011 and at least May 2014 Bilyuchenko and Verner stole the vast majority of bitcoins belonging to Mt. Gox customers. This allegedly contributed to the eventual demise of the platform in February 2014.

The DOJ said it unsealed charges against the Russian nationals in both New York and California, following an ongoing multi-agency investigation into the case. In addition, the prosecutor accused Bilyuchenko of partnering with another individual, Alexander Vinnik, to run the defunct Bulgaria-based cryptocurrency exchange Cryptocurrency Exchange A cryptocurrency exchange is an online platform that supports the exchange of various currencies for a cryptocurrency or digital asset.Comparable to a generalized financial exchange, a crypto exchange’s core function is to permit and encourage the buying and selling of cryptos.This is accomplished by producing a stable trading environment suitable for traders nested through different locations around the world. Sometimes a crypto exchange may be referred to as a digital currency exchange (DCE) f A cryptocurrency exchange is an online platform that supports the exchange of various currencies for a cryptocurrency or digital asset.Comparable to a generalized financial exchange, a crypto exchange’s core function is to permit and encourage the buying and selling of cryptos.This is accomplished by producing a stable trading environment suitable for traders nested through different locations around the world. Sometimes a crypto exchange may be referred to as a digital currency exchange (DCE) f Read this Term, BTC-e, using ‘ill-gotten gains’ from his Mt. Gox hack.

According to the prosecutors, for years, BTC-e, aided criminals across the world, ‘to launder billions of dollars’. These included computer hackers, ransomware actors, narcotics rings and corrupt public officials.

How Mt. Gox’s Stolen Bitcoins Were Moved: DOJ

According to the DOJ, Mt. Gox kept its customers’ crypto wallets and private keys on a computer server in Japan. However, after Bilyuchenko, Verner and their accomplice allegedly stole some of the bitcoins, they laundered most of them through their accounts at two other online BTC exchanges.

Furthermore, the DOJ claimed that Bilyuchenko, Verner and others as part of a device to launder the Bitcoin sometime in April 2012 entered into a so-called advertising services contract with a New York-based Bitcoin brokerage. The firm allegedly helped the accused to hide and liquidate their stolen Bitcoins by making wire transfers of about $6.6 million to overseas bank accounts that they controlled and those in the names of shell companies.

“In exchange for the wire transfers, the New York Bitcoin Broker allegedly received ‘credit’ on Exchange-1, through which Bilyuchenko, Verner, and their co-conspirators allegedly laundered more than 300,000 of the Bitcoins stolen from Mt. Gox,” the DOJ noted, explaining its unsealed indictment.