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Charges Laid on Russian Nationals for Hacking and Collapse of Mt. Gox Crypto Exchange
The U.S. Department of Justice has pressed charges against two Russian nationals for hacking and causing the subsequent collapse of Mt. Gox crypto exchange. In an unsealed indictment, Alexey Bilyuchenko, 43, and Aleksandr Verner, 29, were accused of hacking the exchange and conspiring to launder about 647,000 bitcoins, which are worth about $17.2 billion today. Bilyuchenko was also accused of conspiring with one Alexander Vinnik to operate the illicit exchange,’ BTC-e,’ between 2011 to 2017.
Collapse of Mt. Gox Crypto Exchange
Mt. Gox shuttered in 2014 after being exposed to theft, filing for bankruptcy and going into liquidation. A massive amount of cryptocurrency losses from Mt. Gox theft contributed mainly to the exchange’s ultimate insolvency.
Illicit Exchange – BTC-e
Bilyuchenko was able to establish the BTC-e exchange through his ill-gotten gains from the Mt. Gox heist, laundering funds for criminals globally. Kenneth A. Polite, Jr., Assistant Attorney General of the Justice Department’s Criminal Division, expressed that Bilyuchenko and his co-conspirators had been operating a digital currency exchange that had allowed criminals worldwide, including computer hackers, ransomware actors, narcotics rings, and corrupt public officials, to launder billions of dollars.
BTC-e Transactions
Crypto wallet received about 3,299 bitcoin from BTC-e’s wallet in November 2022, the first transaction sent from the exchange’s wallet since 2017. Six years ago, the wallet sent about 10,000 bitcoins to two unidentified recipients. There is no clarity if those unnamed recipients were Bilyuchenko and Verner.
FAQ
What Are the Dimensions of the Mt. Gox Theft?
The US Department of Justice has accused Russian nationals of causing the subsequent collapse of one of the largest and most popular crypto exchanges, Mt. Gox, by stealing a massive amount of cryptocurrency. The stolen cryptocurrency amounts to 647,000 bitcoins, valued at around $17.2 billion today.
What Is the Link between BTC-e and Alexey Bilyuchenko?
BTC-e was an illicit exchange that laundered funds for criminals worldwide. Alexey Bilyuchenko, one of the accused Russian nationals, established BTC-e with his ill-gotten gains from the Mt. Gox heist.
What Are the Risks Associated with Digital Currency Exchanges?
As the US Department of Justice’s case has shown, digital currency exchanges can be hijacked. More stringent regulation would help protect against hacks, phishing scams, and other fraudulent activities, increasing the transparency of the exchanges, and reducing risks associated with digital currencies.
Conclusion
The charges laid by the US Department of Justice against the two Russian nationals – Alexey Bilyuchenko and Aleksandr Verner – underscore the need for regulating digital currency exchanges better. Such criminal activities highlight the security risks of these exchanges and underline the importance of establishing regulatory standards to reduce such risks.
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