Department of Equity Accuses Russian Citizens of Perpetrating Mt. Gox Breach

The U.S. Department of Justice (DOJ) declared that Alexey Bilyuchenko and Aleksandr Verner, both Russian citizens, were identified as the culprits behind the hacking of the now defunct cryptocurrency exchange, Mt. Gox, in 2011. Additionally, they were implicated in laundering bitcoin obtained from the hack and running an unlawful cryptocurrency exchange.

Key TakeAway

• The Department of Justice claims that Alexey Bilyuchenko and Aleksandr Verner illicitly funneled bitcoin associated with the notorious Mt. Gox breach.
• The illicitly acquired funds were purportedly utilized to establish an alternative exchange named BTC-e, which garnered favor among illicit networks.
• The DOJ asserts that the defendants partook in deceitful agreements with a bitcoin broker based in New York to launder the pilfered bitcoins.
• Mt. Gox's demise in 2014 resulted in significant financial losses for users and an ongoing state of uncertainty concerning the dispersal of the remaining assets held by the Mt. Gox estate. The allegations might facilitate the recovery of additional funds for the victims of Mt. Gox.

Cleaning the Profits of the Mt. Gox Breach

In September 2011, Bilyuchenko, Verner, and their partners purportedly infiltrated the server housing the digital currency wallets of Mt. Gox, the most prominent bitcoin exchange during that period. Using unauthorized means, they reportedly relocated bitcoins from Mt. Gox's wallets to their personal bitcoin addresses under their control.

Over the course of approximately three years, spanning from September 2011 to May 2014, Bilyuchenko, Verner, and their collaborators are alleged to have purloined around 647,000 bitcoins from Mt. Gox. The pilfered bitcoins were purportedly cleansed through bitcoin addresses linked to accounts under the control of Bilyuchenko, Verner, and their partners on two other online bitcoin exchanges, in addition to a specific user account within Mt. Gox itself.

The DOJ's assertions also indicate that the implicated individuals participated in deceitful agreements with a bitcoin broker headquartered in New York to sanitize the pilfered bitcoins that originated from Mt. Gox. Mt. Gox experienced a downfall and declared bankruptcy in 2014, causing substantial monetary damages to countless users who are presently awaiting the allocation of the residual assets from the Mt. Gox estate.

In a separate incident, Alexander Vinnik, a Russian citizen, was formerly accused of operating BTC-e in 2017.