Two Russian Citizens Charged for Masterminding the Mt.Gox Crypto Exchange Hack

June 13, 2023Ravie LakshmananCybercrimes / Cryptocurrencies

The US Department of Justice (DoJ) has indicted two Russian nationals in connection with masterminding the 2014 digital theft of cryptocurrency exchange Mt.Gox.

According to the open indictment released last week, Alexey Bilyuchenko, 43, and Aleksandr Verner, 29, have been accused of conspiring to launder around 647,000 bitcoins stolen from September 2011 to at least May 2014 as a result of unauthorized access to servers holding crypto wallets used by Mt. Gox customers.

“Starting in 2011, Bilyuchenko and Verner stole large amounts of cryptocurrency from Mt. Gox, contributing to the exchange’s bankruptcy,” Assistant Attorney General Kenneth A. Polite, Jr. said in a statement.

Armed with illicit profits from Mt. Gox, Bilyuchenko allegedly helped found a well-known company BTC-e virtual currency exchangelaundering funds for cybercriminals around the world.”

Bilyuchenko and Verner are also alleged to have made large amounts of wire transfers to various offshore bank accounts between March 2012 and around April 2013, laundering more than 300,000 stolen digital assets using the services of an unnamed New York-based Bitcoin broker.

Cyber ​​security

The BTC-e exchange, opened by Bilyuchenko in 2011 in collaboration with Alexander Vinnik and others using crypto looted from Mt. Gox, shut down by law enforcement in 2017, was previously one of the main channels through which cybercriminals cashed in the proceeds of their illegal activities.

What Vinnik extradited from Greece to the US Last August but has since lobbied to be part of a potential prisoner swap between the US and Russia, the Wall Street Journal reported late last month.

“BTC-e serves more than one million users worldwide, transferring millions of bitcoins worth of deposits and withdrawals and processing billions of dollars worth of transactions,” the DoJ said.

“BTC-e receives criminal proceeds from various computer intrusions and hacking incidents, ransomware incidents, identity theft schemes, corrupt public officials, and narcotics distribution networks.”

Money laundering charges leveled against the pair could carry a maximum sentence of 20 years in prison for each of them, if convicted. Bilyuchenko could also potentially face an additional 25 years in prison for running an unlicensed money services business.

Mt.Gox, which was the largest cryptocurrency exchange at the time, officially collapsed soon after the theft and filed for bankruptcy in February 2014. Mark Karpelès, the exchange’s CEO, was considered the prime suspect and was arrested in Japan in August 2015 and charged with fraud and embezzlement.

Karpelès first then punished in Japan in 2019 and received a suspended sentence of 2.5 years after he was found guilty of data manipulation by the Tokyo District Court. However, he was acquitted of embezzlement charges.


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This development occurred when a 39-year-old Romanian citizen named Mihai Ionut Paunescu punished up to three years in prison for running a bulletproof hosting service that “allows cyber criminals to distribute types of malware such as Gozi, Zeus, SpyEye Trojan, BlackEnergy.

Paunescu, who was arrested in Colombia in July 2021 earlier extradition to the US a year later, it was also ordered to forfeit $3.51 million and pay $18,945 in restitution.

The enforcement action also coincided with the US Department of State announce reward offer of up to $5 million for information leading to arrest and conviction Maximilian RivkinSwedish-based criminal of Serbian origin identified as an “administrator and influencer” of encrypted messaging app AN0M (aka ANoM).

AN0M is a trojan horse set up by the US Federal Bureau of Investigation (FBI) and the Australian Federal Police (AFP) in 2018 to covertly monitor the activity of criminal actors on the platform. About 12,000 AN0M-equipped devices were sold to 300 criminal syndicates operating in 100 countries.

Three year sting operation, dubbed Trojan shieldled to more than 800 arrests in 18 countries following analysis of more than 27 million messages involving discussion of methods of concealing narcotics, trafficking of narcotics, money laundering and even threats of violence.

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