US charges two men with Mt. Gox heist, the world’s largest cryptocurrency hack – Source: www.tripwire.com

More than ten years after the hack of the now-defunct Mt. Gox cryptocurrency exchange, the US Department of Justice says it has identified and charged two men it alleges stole customers’ funds and the exchange’s private keys.

Two Russians, 43-year-old Alexey Bilyuchenko, and Aleksandr Verner, 29, are charged with conspiring to launder 647,000 Bitcoins – in a cryptocurrency heist which would have been worth approximately half a billion dollars today.

The DoJ alleges in the unsealed indictment that starting in 2011, Bilyuchenko and Verner stole huge amounts of cryptocurrency from Tokyo-based Mt. Gox, which at the time was the world’s largest Bitcoin exchange.

Mt. Gox stored customers’ Bitcoin holdings in cryptocurrency wallets, and the corresponding private keys used to authorise transfers out of the wallets, on a server in Japan.

Between September 2011 until 2014, Bilyuchenko, Verner, and co-conspirators are alleged to have siphoned Bitcoin from Mt. Gox’s wallets into ones they controlled themselves at other cryptocurrency exchanges.

In February 2014, Mt. Gov announced that it had suffered a security breach, which saw a vast amount of cryptocurrency go missing. Mt. Gox filed for bankruptcy shortly afterwards.

“For years, Bilyuchenko and his co-conspirators allegedly operated a digital currency exchange that enabled criminals around the world – including computer hackers, ransomware actors, narcotics rings, and corrupt public officials – to launder billions of dollars,” said Ismail J. Ramsey, US Attorney for the Northern District of California.

Only about 200,000 Bitcoins taken from Mt. Gox were ever recovered.

The DoJ has also charged Bilyuchenko with operating, with others, the illicit BTC-e cryptocurrency exchange from 2011.

Researchers at Google say that, until it was shut down by authorities in mid-2017, BTC-e could be linked to 95% of traced ransomware payments.

According to Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, BTC-e “laundered funds for cybercriminals worldwide.”

Although Bilyuchenko and Verner have been named by the US Department of Justice, the charges have been filed in absentia, with both men believed to be in Russia and unlikely to appear in a US court anytime soon.

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