The two Russian nationals were charged with conspiring to launder approximately 647,000 bitcoins from their hack of Mt. Gox. Bilyuchenko is also charged with conspiring with Alexander Vinnik to operate BTC-e from 2011 to 2017.
With Bitcoin currently sitting at around $24,000 in secondary markets, the 647,000 Bitcoins stolen from Mt. Gox are now worth over $15.5 billion.
Alexey Bilyuchenko and Aleksandr Verner charged with hacking Mt. Gox
According to court documents unsealed in the Southern District of New York (SDNY), in or about September 2011, the two hackers and their co-conspirators allegedly gained unauthorized access to the server holding the cryptocurrency wallets for Mt. Gox.
At the time, Mt. Gox was the largest Bitcoin exchange in existence, storing the crypto wallets of thousands of users worldwide and the corresponding private keys used to authorize bitcoin transfers from those wallets, on a computer server in Japan.
Through the unauthorized access to Mt. Gox’s server, from September 2011 through at least May 2014, the defendants transferred at least approximately 647,000 bitcoins from Mt. Gox’s wallets to Bitcoin addresses controlled by Bilyuchenko, Verner, and their co-conspirators.
The DoJ also claims that, in furtherance of the money laundering scheme, the defendants negotiated and entered into a fraudulent contract to provide purported advertising services to a Bitcoin brokerage service based in the Southern District of New York in order to conceal and liquidate the bitcoins stolen from Mt. Gox.
Bilyuchenko and Verner allegedly made regular requests to the owner and operator of the New York Bitcoin Broker to make large wire transfers into various offshore bank accounts, including in the names of shell corporations, controlled by Bilyuchenko, Verner, and their co-conspirators, court documents allege.
The unnamed New York Bitcoin Broker allegedly transferred more than approximately $6.6 million to overseas bank accounts controlled by Bilyuchenko, Verner, and their co-conspirators, said the DoJ, adding that in return the broker allegedly received “credit” on an exchange through which the Mt. Gox hackers laundered more than 300,000 of the bitcoins stolen from Mt. Gox.
Disgraced BTC-e exchange was co-founded by Alexey Bilyuchenko
According to court documents unsealed in the Northern District of California (NDCA), Bilyuchenko allegedly worked with Alexander Vinnik and others to operate the BTC-e exchange from 2011 until it was shut down by law enforcement in July 2017.
During that time period, BTC-e was one of the world’s largest cryptocurrency exchanges and was one of the primary ways by which cyber criminals around the world transferred, laundered, and stored the criminal proceeds of their illegal activities.
BTC-e served over one million users worldwide, moving millions of bitcoin worth of deposits and withdrawals, and processing billions of dollars’ worth of transactions. BTC-e received criminal proceeds from numerous computer intrusions and hacking incidents, ransomware events, identity theft schemes, corrupt public officials, and narcotics distribution rings.
