Russian nationals Alexey Bilyuchenko and Aleksandr Verner have been charged with the 2011 hacking of the leading cryptocurrency exchange Mt. Gox and the laundering of around 647,000 bitcoins they stole.
The U.S. Department of Justice also charged Bilyuchenko with conspiring with Russian national Alexander Vinnik to run the unlicensed BTC-e Bitcoin trading platform between 2011 and 2017.
According to the unsealed indictment, in September 2011, a group including the two defendants hacked Mt. Gox, the largest bitcoin exchange at the time, stealing roughly 647,000 bitcoins over the next few years.
This was the majority of the bitcoins owned by the exchange’s customers. Mt. Gox shut down in 2014 after the hack was disclosed.
Bilyuchenko, Verner, and the other group members laundered the stolen bitcoins through various means, including bitcoin addresses associated with their accounts on two additional exchanges and a specific user account on Mt. Gox.
A Bitcoin brokerage service known as the New York Bitcoin Broker also helped them transfer more than $6.6 million to overseas bank accounts between March 2012 and April 2013 under the guise of an advertising services contract.
“As alleged in the indictment, the defendants gained unauthorized access to a server used by Mt. Gox to house cryptocurrency wallets,” said FBI Assistant Director in Charge Michael J. Driscoll.
“Mt. Gox was the world’s largest bitcoin exchange at the time, and the defendants used their unauthorized access to steal the bulk of the bitcoins held by Mt. Gox customers.”
Charges for operating BTC-e
An unsealed indictment in the Northern District of California also says that Bilyuchenko, along with Alexander Vinnik and others, operated the BTC-e illicit crypto exchange from 2011 until its shutdown in July 2017.
BTC-e facilitated the transfer, laundering, and storage of criminal proceeds for cybercriminals worldwide and was believed to have helped cash out 95% of ransomware payments before being taken down.
With over a million users, BTC-e processed millions of bitcoins in deposits and withdrawals, handling transactions worth billions of dollars.
This exchange received illicit funds from various sources, including computer intrusions, ransomware attacks, identity theft schemes, corrupt officials, and drug distribution rings.
“For years, Bilyuchenko and his coconspirators operated a digital currency exchange that enabled criminals around the world – including computer hackers, ransomware actors, narcotics rings, and corrupt public officials – to launder billions of dollars,” said NDCA U.S. Attorney Ismail J. Ramsey.