Russians Are Charged in Crypto-Theft in Hack of Mt. Gox Exchange Two defendants are accused of conspiring to launder about 647,000 bitcoin, the equivalent of $17 billion today By James Fanelli and Alexander Osipovich June 9, 2023 2:16 pm ET Mt. Gox was once the dominant exchange for bitcoin trading, but a hack led to its shutdown in 2014. PHOTO: ALAMY Two Russian nationals were charged with stealing about 647,000 bitcoin in a hack of Mt. Gox, draining the now-defunct crypto exchange between 2011 and 2014 of digital currency that today would be valued at $17 billion. Alexey Bilyuchenko and Aleksandr Verner were charged with conspiring to launder the bitcoin by transferring the money to shell companies and accounts held in other people’s names, the Justice Department said in announcing the case Friday. In an indictment unsealed earlier this week, federal prosecutors in New York alleged that the two defendants and others hacked into Mt. Gox and transferred customers’ bitcoin that was held on the Japanese-based exchange. Mt. Gox was once the dominant exchange for bitcoin trading, but the hack led to its shutdown in 2014 and set off a global hunt for the missing crypto. The defendants are also accused of arranging a fraudulent contract with a bitcoin brokerage service based in New York to provide purported advertising services. The arrangement was in reality used to launder bitcoin, according to prosecutors. NEWSLETTER SIGN-UP What’s News Catch up on the headlines, understand the news and make better decisions, free in your inbox every day. Subscribed The indictment and the arrest warrants for Bilyuchenko, 43 years old, and Verner, 29, had been under seal since 2019. The two men are at large, according to a spokesman for the Manhattan U.S. attorney’s office, which brought the charges. Bilyuchenko and Verner couldn’t be reached for comment and their lawyers weren’t immediately known. Earlier this week, the office requested the court unseal the indictment. In a letter also unsealed this week, prosecutors said they thought the defendants were outside the U.S. and wanted to share the indictment and warrants with foreign governments and law enforcement, including the global police body Interpol. Advertisement - Scroll to Continue The Justice Department also said Friday that Bilyuchenko was separately charged in a federal court in California with conspiring with another Russian national, Alexander Vinnik, to operate an illicit cryptocurrency exchange from 2011 to 2017. The exchange, BTC-e, was one of the world’s largest and was used by cybercriminals worldwide to transfer, launder and store illegal proceeds. Bilyuchenko was charged in the California case with conspiracy to commit money laundering and operating an unlicensed money services business. Vinnik was arrested and charged in 2017 with illegally operating BTC-e in a 21-count indictment, which included the allegation that he laundered funds from the hack of Mt. Gox. He pleaded not guilty. He was extradited to the U.S. from Greece in August. Mt. Gox originally stood for Magic: The Gathering Online Exchange, a reference to the popular fantasy card game Magic: The Gathering. Founder Jed McCaleb conceived it as a trading platform for the game’s playing cards and registered the domain name mtgox.com. In 2010, McCaleb decided to repurpose Mt. Gox as an exchange for bitcoin, then a little-known form of digital cash that had just been invented by its mysterious creator, known by the pseudonym Satoshi Nakamoto. Soon afterward McCaleb sold Mt. Gox to Mark Karpelès, a French entrepreneur who was running an IT company in Tokyo. Mt. Gox took off amid an early wave of enthusiasm for bitcoin, and was at one point handling around 80% of bitcoin trades. On Feb. 7, 2014, Mt. Gox halted withdrawals, blaming a technical glitch. It soon became clear that hundreds of thousands of bitcoin had gone missing, and Mt. Gox filed for bankruptcy protection. The price of bitcoin slumped by more than half in the months that followed, in an early example of the boom-and-bust cycles that have characterized the crypto market since its formation. Mt. Gox’s creditors are still awaiting payouts in the long-running bankruptcy process.
Interesting story, though I was looking forward to much more details of how the perps were identified and the missing coins tracked over time.
That's two more Russians that are going to suspiciously fall through a window soon... Funny how that happens so much these days!