DOJ Accuses Russian Nationals of Money Laundering Through Bitcoin in 2011 Mt. Gox Hack
Two Russian nationals, Alexey Bilyuchenko and Aleksandr Verner, have been charged by the US Department of Justice for their involvement in the 2011 hacking of Mt. Gox, a now-defunct cryptocurrency exchange that was once among the world’s largest. The charges, filed in the Southern District of New York, allege that the two individuals laundered approximately 647,000 bitcoins linked to the theft. Bilyuchenko also faces charges in the Northern District of California for his role in operating the notorious Russian cryptocurrency exchange, BTC-e.
The couple is charged in the SDNY with conspiracy to commit money laundering. Meanwhile, the NDCA charges are conspiracy to launder money and engage in an unauthorized money services business. The SDNY charges carry a maximum sentence of 20 years for each defendant, while Bilyuchenko faces up to 25 years in prison under the NDCA charge.
According to the DOJ, Bilyuchenko, Verner and co-conspirators gained access to Mt. Gox’s server storing crypto wallets around September 2011. After they infiltrated the servers, the couple and their associates allegedly began transferring customers’ bitcoins to accounts they controlled. In addition, they are accused of laundering stolen bitcoins into the accounts of other crypto exchanges controlled by the group.
The conspiracy allegedly negotiated and entered into a fraudulent “advertising agreement” with a New York bitcoin brokerage. They requested regular transfers to “various offshore bank accounts, including in the names of Shell companies controlled by Bilyuchenko, Verner, and their co-conspirators.” According to the DOJ, the group transferred more than $6.6 million between March 2012 and April 2013.
“This announcement marks an important milestone in two major cryptocurrency investigations,” said U.S. Assistant Attorney General Kenneth A. Polite, Jr. “As the indictment alleges, Bilyuchenko and Verner stole massive amounts of cryptocurrency from Mt. Gox beginning in 2011, contributing to the eventual insolvency of the exchange. Bilyuchenko armed with Gox -with ill-gotten gains from Mt., allegedly helped establish the notorious BTC-e virtual currency exchange, which laundered funds for cybercriminals worldwide.These charges underscore the department’s unwavering commitment to bringing to justice the bad actors in the cryptocurrency ecosystem and preventing abuse of the financial system.
