The United States Department of Justice [DoJ] announced the arrest of two Russians for hacking the then-biggest Bitcoin [BTC] exchange – Mt Gox. The authorities have identified the hackers as Alexey Bilyuchenko and Aleksandr Verner. The case alleges that both individuals “gained unauthorized access to the server holding the cryptocurrency wallets for Mt Gox.”
Notably, the incident, which began around September 2011, saw the accused transfer Mt Gox’s BTC to an address controlled by them and their co-conspirators. Moreover, the accused continued to deploy this tactic at least until May 2014, resulting in 647,000 BTCs being stolen. And, these coins majorly belonged to customers. Currently, these Bitcoins are worth over $17 billion and would have been valued at more than $44 billion during BTC’s all-time high.
Notably, the once-biggest Bitcoin exchange had declared bankruptcy in February 2014. The exchange, which controlled over 7% of BTC transactions in its peak, took this drastic step because of undetected theft that had been going on since 2011. The incident resulted in the arrest of its CEO Mark Karpeles and was subsequently sent to prison for his negligence. Moreover, Mt Gox’s bankruptcy proceedings rehabilitation plan is still ongoing and would mark its one-decade anniversary next year.
The press release by the DoJ read,
“Bilyuchenko, Verner, and their co-conspirators laundered the bulk of the bitcoins stolen from Mt. Gox principally through bitcoin addresses associated with accounts Bilyuchenko, Verner, and their co-conspirators controlled at two other online bitcoin exchanges (“Exchange-1” and “Exchange-2”), as well as a particular user account on Mt. Gox itself.”
The story is still developing…