DOJ unseals Mt. Gox charges against 2 Russian nationals

Alexey Bilyuchenko and Aleksandr Verner were charged with money laundering in connection with the Mt. Gox hack


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US charges against two Russian nationals tied to the 2011 hack of Mt. Gox, the then-massive bitcoin exchange, were unsealed on Friday. 

The Department of Justice named Alexey Bilyuchenko and Aleksandr Verner with conspiracy to commit money laundering. Bilyuchenko was also charged in another investigation from the Northern District of California, which alleged that Bilyuchenko worked with Alexander Vinnik. 

Bilyuchenko was charged with an additional count of money laundering conspiracy, as well as operating an unlicensed money services business. 

Assistant Attorney General Kenneth Polite said that the charges mark an “important milestone” in prosecutors’ dual “major cryptocurrency investigations.” 

“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,” Polite said. “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.” 

The Mt. Gox hack, which began in September 2011 and lasted through May 2014, resulted in the loss of approximately 647,000 bitcoins (BTC). It went down as the largest ever disappearance of bitcoin in both bitcoin and dollar terms at the time, a designation that lasted for years.  

Bilyuchenko and Verner, as well as additional unnamed co-conspirators, were behind the theft from Mt. Gox, prosecutors said. 

“According to court documents unsealed in the Southern District of New York (SDNY), in or about September 2011, Bilyuchenko, Verner, and their co-conspirators allegedly gained unauthorized access to the server holding the cryptocurrency wallets for Mt. Gox,” the DOJ’s statement said. 

Prosecutors said that “between in or about March 2012 and in or about April 2013, the New York Bitcoin Broker allegedly transferred more than approximately $6.6 million to overseas bank accounts controlled by Bilyuchenko, Verner, and their co-conspirators.”

“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 release continued.

The claims additionally tie Bilyuchenko to bitcoin launderer Vinnik to operate BTC-e from 2011 to 2017.

Vinnik was charged with a 21-count indictment in 2017, which alleged he had laundered over $4 billion in bitcoin through BTC-e. 

Last August, he was extradited to the US to face charges.

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