Russian Nationals Charged by US Government for $400 Million Bitcoin Hack that Collapsed Mt. Gox

In a significant development, the United States federal government has filed charges against two Russian individuals in relation to a series of cyberattacks that led to the collapse of the renowned Mt. Gox Bitcoin exchange in 2014. The Department of Justice, in a press release issued on Friday, revealed that it has unsealed a 2019 indictment, charging Alexey Bilyuchenko and Aleksandr Verner with a conspiracy to launder approximately 647,000 Bitcoins, valued at around $400 million at the time, which were stolen from the exchange.

Additionally, the government has levied separate charges against Bilyuchenko for his collaboration with Alexander Vinnik, who was indicted by the DOJ in 2017 and later extradited to the United States in the fall of last year. The charges against Bilyuchenko pertain to his involvement in the operation of BTC-e, a defunct cryptocurrency exchange that served as a prominent hub for cybercriminals worldwide, facilitating the transfer, laundering, and storage of illicit proceeds.

According to the government’s previous allegations during Vinnik’s indictment, funds pilfered from Mt. Gox had been funneled through BTC-e and wallets associated with Vinnik. The latest revelations from the DOJ now accuse Bilyuchenko, Verner, and other co-conspirators of laundering over 300,000 stolen Bitcoins from Mt. Gox.

In 2015, Mark Karpeles, the owner and CEO of Mt. Gox, was arrested and indicted in Japan on charges including embezzlement and aggravated breach of trust. However, in 2019, Karpeles was acquitted of most charges, with a suspended sentence imposed for falsifying data. In response to the recently unsealed indictment, Karpeles retweeted a post referencing the matter.

Assistant Attorney General Kenneth A. Polite, Jr., stated in a released statement,

“As alleged in the indictments, starting in 2011, Bilyuchenko and Verner stole a massive amount of cryptocurrency from Mt. Gox, contributing to the exchange’s ultimate insolvency. Armed with the ill-gotten gains from Mt. Gox, Bilyuchenko allegedly went on to help set up the notorious BTC-e virtual currency exchange, which laundered funds for cybercriminals worldwide.”

Bilyuchenko is facing charges for conspiracy to commit money laundering and operating an unlicensed money services business, carrying a possible prison sentence of over 20 years. On the other hand, Verner is charged with conspiracy to commit money laundering, with a maximum penalty of 20 years behind bars. The legal proceedings against both individuals will be closely watched, as the outcome could set a precedent for cybercrime-related cases involving cryptocurrencies.

This case serves as a stark reminder of the vulnerabilities faced by cryptocurrency exchanges and the ongoing efforts of law enforcement agencies to hold cybercriminals accountable for their illicit activities in the digital realm.

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