The U.S. Department of Justice reveals: Two Russians stole 640,000 bitcoins from Mt. Gox?
Original source:US Department of Justice
Original compilation: Wu said blockchain
Original compilation: Wu said blockchain
Bilyuchenko and Verner were charged in the Southern District of New York with conspiring to launder approximately 647,000 bitcoins from Mt. Gox in 2011 (the "SDNY case"). Bilyuchenko was separately charged in the Northern District of California with conspiring with Alexander Vinnik to operate the illegal cryptocurrency exchange BTC-e from 2011 to 2017 (“NDCA Case”). The SDNY case has been assigned to U.S. District Judge P. Kevin Castel. The NDCA case has been assigned to U.S. District Judge Chhabria.
Assistant Attorney General Kenneth A. Polite, Jr. said: "This announcement marks an important milestone in two major cryptocurrency investigations. As alleged in the indictment, beginning in 2011, Bilyuchenko and Verner stole from Mt. Gox A large amount of cryptocurrency, which led to the exchange's eventual bankruptcy.Bilyuchenko allegedly used funds obtained illegally from Mt. Gox, and continued to participate in the establishment of the notorious cryptocurrency exchange BTC-e, laundering money for cybercriminals around the world.These indictments The book underscores the department's unwavering commitment to bringing bad actors in the cryptocurrency ecosystem to justice and preventing the financial system from being abused."
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SDNY case
In or about September 2011, Bilyuchenko, Verner, and their co-conspirators gained unauthorized access to servers storing Mt. Gox cryptocurrency wallets. At the time, Mt. Gox was the largest bitcoin exchange in the world, serving thousands of users around the world, including those in the Southern District of New York. Mt. Gox stored cryptocurrency wallets containing its customers' bitcoins and the corresponding private keys used to authorize bitcoin transfers from those wallets on a computer server in Japan.
Bilyuchenko, Verner, and their co-conspirators used unauthorized access to Mt. Gox servers to fraudulently transfer bitcoins from Mt. Gox's wallets to bitcoin addresses controlled by Bilyuchenko, Verner, and their co-conspirators. From September 2011 through at least May 2014, Bilyuchenko, Verner, and their co-conspirators resulted in the theft of at least approximately 647,000 bitcoins from Mt. Gox, representing the vast majority of the bitcoins held by Mt. Gox customers most. Bilyuchenko, Verner, and their co-conspirators primarily through Bitcoin associated with accounts controlled by Bilyuchenko, Verner, and their co-conspirators at two other online bitcoin exchanges (“Exchange-1” and “Exchange-2”) address, as well as a specific user account at Mt. Gox itself, to launder most of the bitcoins stolen from Mt. Gox.
Mt. Gox ceased operations in 2014 after the theft came to light.
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NDCA case
Working with Alexander Vinnik and others, Bilyuchenko operated the BTC-e exchange from 2011 until it was shut down by law enforcement in July 2017. During this period, BTC-e was one of the largest cryptocurrency exchanges in the world and one of the main ways for cybercriminals around the world to transfer, launder and store the criminal proceeds of their illicit activities.
BTC-e serves more than one million users worldwide, transfers deposits and withdrawals worth millions of Bitcoins, and processes transactions worth billions of dollars. BTC-e has received numerous computer intrusions and hacking incidents, ransomware incidents, identity theft schemes, criminal proceeds from corrupt public officials and drug distribution rings.
The SDNY indictment accuses Bilyuchenko, 43, and Verner, 29, both Russian citizens, of conspiring to launder money. If convicted of the charges in the SDNY indictment, each defendant faces up to 20 years in prison.
The NDCA indictment charges Bilyuchenko with conspiracy to launder money and operate an unlicensed money services business. If convicted on the charges in the NDCA indictment, Bilyuchenko faces up to 25 years in prison.
The above maximum potential sentences are set by Congress and are for information only, as any sentencing of defendants will be determined by the courts.
US Attorney Mr. Williams commended the work of the IRS-CI and the FBI in investigating the SDNY case.
The SDNY case is being handled by the Complex Fraud and Cybercrime Unit of the U.S. Attorney's Office for the Southern District of New York. Assistant US Attorney Olga I. Zverovich is prosecuting the SDNY case.
NDCA cases are handled by the Corporate and Securities Fraud Section of the U.S. Attorney's Office for the Northern District of California and the Criminal Division's Computer Crimes and Intellectual Property Section ("CCIPS"). CCIPS trial attorney C. Alden Pelker and NDCA Assistant U.S. Attorney Claudia Quiroz, both members of the national cryptocurrency enforcement team, and NDCA Assistant U.S. Attorney Katherine Lloyd-Lovett are prosecuting the case. The Federal Bureau of Investigation (FBI); the Oakland Office and Cybercrime Unit of the IRS-CI in Washington, D.C.; the U.S. Secret Service's Criminal Investigations Division; and Homeland Security Investigations are investigating the case. The Department of Justice's Office of International Affairs provided invaluable assistance.
