The United States Department of Justice [DoJ] announced the arrest of two Russians for hacking the then largest Bitcoin [BTC] exchange – Mt Gox. Authorities have identified the hackers as Alexey Bilyuchenko and Aleksandr Verner. The case alleges that both individuals “gained unauthorized access to the server containing the cryptocurrency wallets for Mt Gox.”
Most notably, the incident, which began around September 2011, caused the accused to transfer BTC from Mt Gox to an address controlled by them and their co-conspirators. Furthermore, the suspects continued to employ this tactic at least until May 2014, resulting in the theft of 647,000 BTCs. And these coins were largely from customers. Currently, these Bitcoins are worth more than $17 billion and would have been valued at more than $44 billion during BTC’s all-time high.
Notably, the once largest Bitcoin exchange had declared bankruptcy in February 2014. The exchange, which controlled more than 7% of BTC transactions at its peak, took this drastic step due to 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. In addition, the bankruptcy proceedings of Mt Gox rehabilitation plan is still ongoing and should celebrate its tenth anniversary next year.
The DoJ press release read:
“Bilyuchenko, Verner and their co-conspirators laundered most of the bitcoins stolen from Mt. Gox, primarily through bitcoin addresses linked to accounts Bilyuchenko, Verner and their co-conspirators controlled on 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…
