US Justice Department charges two men in Mt. Gox Hack

The United States Justice Department has revealed indictments against two men who it claims were the perpetrators of the Mt. Gox Bitcoin (BTC) theft of $400 million. Alexey Bilyuchenko, aged 43, and Aleksandr Verner, aged 29, are said to have conspired to launder 647,000 BTC that were taken from Mt. Gox via a hack of the exchange’s servers.

Bilyuchenko is also accused of conspiring to run the BTC-e exchange, which was closed in 2017 due to accusations of money laundering.

Prosecutors allege that the hack spanned more than a year, from September 2011 to May 2014, during which the two men allegedly gained access to a Mt. Gox server in Japan. It is said that they subsequently made multiple transfers of Bitcoin from the exchange to themselves, until the “vast majority” of customers’ Bitcoin had been taken.

Having obtained the Bitcoin, the men attempted to sell them through a different exchange they had control over. To complete these sales, the two men entered into an apparently fraudulent contract with a Bitcoin brokerage business situated in New York. The brokerage company purchased the stolen BTC from the hackers by transferring funds to multiple offshore bank accounts. The Bitcoin itself remained in the possession of the hackers’ exchange, but was credited to the brokerage firm’s account within it.

The statement does not specify if Exchange-1 was BTC-e or not, but prosecutors allege that the two individuals involved obtained around $6.6 million from the transaction.

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Mt. Gox, one of the pioneering cryptocurrency exchanges, declared bankruptcy in March 2014, citing the hack as the cause of its insolvency.

From 2011 to 2017, BTC-e was in operation. In 2017, the Federal Bureau of Investigation confiscated some of its digital currency, asserting that the funds had been acquired through money laundering. Alexander Vinnik, BTC-e’s creator, is currently incarcerated for his involvement with the exchange. In May, Vinnik’s legal representative tried to get him freed as part of an exchange of prisoners with the Russian Federation.