After more than a decade, the Department of Justice (DOJ) has finally charged the hackers who stole hundreds of thousands of Bitcoins from the now-defunct cryptocurrency exchange giant, Mt. Gox. The primary culprits behind the heist have been identified as Russian nationals, Alexey Bilyuchenko (43) and Aleksandr Verner (29). The DOJ stated in a press release that both Bilyuchenko and Verner are accused of “conspiring to launder approximately 647,000 bitcoins from their hack of Mt. Gox.”
The hack was reported to have occurred approximately in September 2011 when co-conspirators gained unauthorized access to the Japanese computer system holding the private keys controlling customers’ Bitcoin. The hackers then stole coins through May 2014, after which the exchange had already forfeited plans to rebuild. The bulk of the stolen assets was funneled through Bitcoin addresses connected to accounts controlled by Bilyuchenko, Verner, and their co-conspirators at other crypto exchanges.
IRS-CI Takes on the Case
The IRS Criminal Investigation (IRS-CI) is equipped to follow the complex financial trail left by criminals, and it is dedicated to holding those accountable for crimes committed. IRS-CI Chief Jim Lee stated that the IRS-CI is specially equipped to follow the complex financial trail left by criminals, and it is dedicated to holding those accountable for crimes committed.
Mt. Gox was one of the most prominent Bitcoin exchanges of all time, controlling 70% of Bitcoin trading volume by 2014. Its hack still stands as the largest exchange hack of all time in BTC-denominated terms, with its lost 744,408 coins, now representing over $19 billion in value.
The Bilyuchenko and Vinnik Connection
After his massive Mt. Gox steal, Bilyuchenko also conspired with Alexander Vinnik to operate BTC-e from 2011 to 2017 – a cryptocurrency exchange funded using “ill-gotten gains from Mt. Gox.” According to the DOJ, BTC-e processed billions of dollars worth of transactions, much of which came from “hacking incidents, ransomware events, identity theft schemes, corrupt public officials, and narcotics distribution rings.”
Bilyuchenko has been charged with money laundering conspiracy for his crimes at Mt. Gox, and with both money laundering conspiracy and operating an unlicensed money services business at BTC-e.
The DOJ had identified the culprits behind the Mt. Gox Bitcoin heist that took place in 2014. The hackers, who were Russian nationals, had stolen up to 647,000 Bitcoins, which were funneled through Bitcoin addresses connected to accounts controlled by Bilyuchenko, Verner, and their co-conspirators at other crypto exchanges. The IRS-CI has taken on the case, and the investigation is ongoing.