Department of Justice breaks the seal indictment Friday claims to have identified two hackers who took down the infamous Mt Gox cryptocurrency exchange over a decade ago.
It is commonly remembered that one of the first In 2011, Mt. Gox was hacked, resulting in the loss of about 647,000 bitcoins, while major cryptocurrency exchanges were plagued by thefts and financial mismanagement. Shortly thereafter, the company went bankrupt and the former CEO was arrested and charged with fraud and embezzlement. Mt Gox at the time Largest cryptocurrency exchange And its collapse had a painful impact on the relatively young cryptocurrency community at the time.
Since then, the identity of the hacker who committed the massive theft has remained a secret, but according to unsealed information, court document, the culprits have now been identified: Alexei Bilyuchenko and Alexander Werner, two Russians accused of being masterminds of this massive digital heist. According to the indictment, in 2011, Viryunchenko, Verner, and an unnamed co-conspirator accessed a web server where Gox stored user assets. It’s unclear how Vilinchenko and Varner obtained the illegal goods, but prosecutors say they used it to transfer bitcoins from users’ wallets to their own. Now that amount would have been their profit. $17.2 billion. Over the next few years, the two allegedly conspired to launder money through an anonymous New York-based Bitcoin brokerage service.
“As alleged in the indictment, Mr. Bilyuchenko and Mr. Verner stole large amounts of cryptocurrency from Mt.Gox since 2011, leading to the exchange’s eventual bankruptcy,” the indictment said. said Assistant Attorney General Kenneth A. Polite, Jr. . “These indictments underscore the ministry’s unwavering commitment to bringing bad actors to justice in the cryptocurrency ecosystem and preventing abuse of the financial system.”
Friday’s announcement did not say whether the two were in custody or if the government plans to arrest them.
In addition to being charged with destroying Mt. Gox, Mr. Bilyuchenko is also accused of helping run a dubious cryptocurrency exchange he created. Federal prosecutors allege that the Russians used funds stolen from Gox to set up BTC-e. BTC-e is now a defunct exchange, at the time have a bad reputation for corruption. Founded in California in 2011, his BTC-e will soon become one of the major online financial hubs for cybercriminals and shady digital actors, prosecutors claim. On Friday, officials noted that BTC-e is “one of the primary means by which cybercriminals around the world transfer, launder and store criminal proceeds from illegal activities.”U.S. Department of Justice BTC-e website seized In 2017, all of its funds closed, leading to closure.
Bilyuchenko has been separately charged in a California court with money laundering and conspiracy to operate an unlicensed money services business due to his role in the operation of BTC-e.
ongoing financial crisis
Founded in 2010, Mt Gox was, oddly enough, initially a platform centered around trading collectible card games. Magic: The Gathering, but later shifted to cryptocurrencies. The company enjoyed rapid early growth and briefly survived as the single largest cryptocurrency exchange on the web. By the peak just before the hack, the Japan-based exchange was responsible. About 80% of cryptocurrency trading in the world of those days.
After being hacked and receiving numerous accusations of fraud and mismanagement, the exchange officially collapsed It filed for bankruptcy in 2014, resulting in huge losses for the platform’s approximately 24,000 users. The exchange’s CEO Mark Karpeles, considered the prime suspect in the disappearance of user funds, was arrested in Japan in 2015 and charged with fraud and embezzlement. In 2019, a Japanese court handed Karpeles a suspended sentence on embezzlement charges, but was acquitted of the embezzlement charges. found him guilty Suspicion of fraudulently falsifying exchange data to inflate holdings.
Since then, Mt Gox has been considered the canary of digital asset mining. A similar collapse causes an avalanche It will haunt the cryptocurrency industry for the next decade. Unfortunately, as you can see, FTX debaclethe cryptocurrency world never learned its lesson.