The United States has charged two Russian individuals for their involvement in the laundering of funds from the hack of the defunct cryptocurrency exchange Mt. Gox.
The DoJ posted a press release that announced the indictment charges of 43 year old Alexey Bilyuchenko and 29 year old Aleksandr Verner with laundering 647,000 bitcoins which they stole from Mt. Gox exchange.
They were indicted on one count according to the indictment filed in December 2019, the duo and their accomplices hacked into Mt. Gox’s servers in September 2011. Between 2011 and May 2014, the defendants transferred a total of approximately 647,000 bitcoins from Mt. Gox’s wallets to Bitcoin addresses they controlled.
The defendants and their accomplices moved 530,000 of the bitcoin to their accounts at the now-defunct crypto exchanges, BTC-e and Trade Hill. They also used another wallet at Mt. Gox.
In April 2012, the defendants got into a fraudulent advertising contract with an undisclosed New York-based Bitcoin broker. By April 2013, the broker had allegedly transferred a total of over $6.6 million to overseas accounts controlled by the defendants. In return, the broker received bitcoin from the defendants on BTC-e.
In addition to hacking Mt. Gox, Bilyuchenko was charged with running BTC-e in a separate darkweb indictment. The two-count indictment accuses Bilyuchenko of collaborating with Alexander Vinnik and others in the operation of BTC-e. Vinnik was extradited to the US from Greece to face charges in connection to his role in the operation of BTC-e.
The indictment claims that from its establishment in 2011 to its shutdown in 2017, BTC-e was used to launder the proceeds of various criminal activities including hacking and drug trafficking. BTC-e was preferred because it did not enforce KYC measures.
One of the biggest money laundering schemes conducted through BTC-e was the movement of 300,000 bitcoin stolen from Mt.Gox. The bitcoins were moved through three separate accounts on BTC-e.
Verner faces a charge of conspiracy to commit money laundering. Bilyuchenko is charged with money laundering conspiracy and operation of an unlicensed money-transmitting business. The whereabouts of the two defendants are unknown.