The DOJ announced that Russian nationals Alexey Bilyuchenko and Aleksandr Verner have been charged with conspiracy to commit money laundering, money laundering, and operating an unlicensed money services business. Bilyuchenko and Verner allegedly hacked cryptocurrency exchange Mt. Gox and laundered bitcoin. It is also alleged that Bilyuchenko assisted in operating the illicit cryptocurrency exchange—BTC-e.

According to unsealed indictments from the Southern District of New York and the Northern District of California, in approximately September 2011, Bilyuchenko and Verner gained access to Mt. Gox’s server in Japan which held the exchanges cryptocurrency wallets. In turn, they transferred bitcoin from Mt. Gox’s wallets to bitcoin wallets controlled by Bilyuchenko and Verner. It is alleged that approximately 647,000 bitcoins were stolen from Mt. Gox between September 2011 and May 2014. Mt. Gox was the largest Bitcoin exchange in existence at the time of the alleged fraudulent activity. Bilyuchenko and Verner’s fraudulent actions contributed to the exchange’s insolvency and ultimate closure in 2014.

Bilyuchenko also allegedly conspired with Alexander Vinnik to operate BTC-e from 2011 to 2017. BTC-e was known as one of the world’s largest cryptocurrency exchanges for cyber criminals. This exchange processed millions of bitcoin transactions related to hacking incidents, ransomware events, and narcotics distribution. BTC-e processed billions of dollars before it was shut down in July 2017.

U.S. Attorney Damian Williams for the Southern District of New York commented “[a]s cyber criminals have become more sophisticated in their methods of thievery, our career prosecutors and law enforcement partners, too, have become experts in the latest technologies being abused for malicious purposes.” 

The attorneys at Chilivis Grubman have experience representing clients of all types and sizes who have experienced a data breach, other cyber security incidents, and litigation as a result of such an incident. If you need assistance with such a matter, please contact us today.