U.S. DOJ Unveils Identities of Mt. Gox Hackers

The US Department of Justice (DOJ) has unveiled the hackers’ identities behind the infamous Mt. Gox cryptocurrency exchange hack of 2011.

In a Friday statement, the DOJ announced that Russian nationals Alexey Bilyuchenko and Aleksandr Verner had been charged with conspiring to launder approximately 647,000 bitcoins stolen from Mt. Gox. Additionally, Bilyuchenko was charged with operating the illicit cryptocurrency exchange BTC-e from 2011 to 2017 in collaboration with Alexander Vinnik. The Mt. Gox hack was a significant event in the cryptocurrency industry, leading to the exchange’s insolvency.

The DOJ’s indictment alleges that Bilyuchenko and Verner, along with their co-conspirators, gained unauthorized access to Mt. Gox’s server in September 2011 and fraudulently transferred the stolen bitcoins from the exchange wallets to addresses controlled by themselves and their co-conspirators over about three years. Moreover, the two were also charged with conspiracy to commit money laundering, with Bilyuchenko facing an additional charge of operating an unlicensed money services business.

Additionally, the DOJ alleged that Bilyuchenko and his co-conspirators operated a digital currency exchange that enabled criminals worldwide, including hackers, ransomware actors, narcotics rings, and corrupt public officials, to launder billions of dollars. The DOJ then expressed its commitment to identifying cybercriminals regardless of their location, emphasizing that Bilyuchenko and his co-conspirators will face justice for the harm caused to communities.

“Alexey Bilyuchenko and Aleksandr Verner thought they could outsmart the law by using sophisticated hacks to steal and launder massive amounts of cryptocurrency, but the charges unsealed demonstrate our ability to tenaciously pursue these alleged criminals until they are brought to justice.” Said Damian Williams for the Southern District of New York.

In a separate indictment unsealed in the Northern District of California (NDCA), Bilyuchenko was accused of working with Alexander Vinnik and others to operate the BTC-e exchange from 2011 until its closure in July 2017. Notably, BTC-e was one of the largest cryptocurrency exchanges globally and served as a means for cybercriminals to transfer, launder, and store the proceeds of their illegal activities.

Mt. Gox ceased operations in 2014 after the extent of the theft was revealed, impacting the credibility and trust in the cryptocurrency industry. That said, creditors of the now-defunct cryptocurrency exchange Mt. Gox are set to receive compensation following the approval of a rehabilitation plan.

The plan, accepted by a significant majority of voting rehabilitation creditors, aims to reimburse victims, with eligible ones receiving approximately 90% of their assets. On Wednesday, June 7, the rehabilitation plan became “final and binding”, officially opening the window for compensation. However, although there has been no soft date set for the distribution, the plan is expected to be finalized before year-end, according to a previous communique.