Damian Williams, the United States Attorney for the Southern District of New York, Kenneth A. Polite, Jr., the Assistant Attorney General for the Department of Justice’s Criminal Division, Ismail J. Ramsey, the United States Attorney for the Northern District of California, James C. Lee, the Chief of the Internal Revenue Service-Criminal Investigation (“IRS-CI”), Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), William Mancino, the Special Agent in Charge of the U.S. Secret Service’s Criminal Investigative Division (“USSS”), and Katrina W. Berger, the Acting Executive Associate Director of Homeland Security Investigations (“HSI”), announced the unsealing of charges against Alexey Bilyuchenko and Aleksandr Verner, both Russian nationals. Bilyuchenko and Verner are charged in the Southern District of New York with conspiring to launder approximately 647,000 bitcoins from the 2011 hack of Mt. Gox (the “SDNY Case”). Bilyuchenko is separately charged in the Northern District of California with conspiring with Alexander Vinnik to operate the illicit cryptocurrency exchange BTC-e from 2011 to 2017 (the “NDCA Case”). The SDNY Case has been assigned to U.S. District Judge P. Kevin Castel. The NDCA Case has been assigned to U.S. District Judge Chhabria.
U.S. Attorney Damian Williams said: “As 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. As alleged, Alexey Bilyuchenko and Aleksandr Verner thought they could outsmart the law by using sophisticated hacks to steal and launder massive amounts of cryptocurrency, a novel technology at the time, but the charges unsealed demonstrate our ability to tenaciously pursue these alleged criminals, no matter how complex their schemes, until they are brought to justice.”
Assistant Attorney General Kenneth A. Polite, Jr. said: “This announcement marks an important milestone in two major cryptocurrency investigations. As alleged in the indictments, starting in 2011, Bilyuchenko and Verner stole a massive amount of cryptocurrency from Mt. Gox, contributing to the exchange’s ultimate insolvency. Armed with the ill-gotten gains from Mt. Gox, Bilyuchenko allegedly went on to help set up the notorious BTC-e virtual currency exchange, which laundered funds for cyber criminals worldwide. These indictments highlight the department’s unwavering commitment to bring to justice bad actors in the cryptocurrency ecosystem and prevent the abuse of the financial system.”
NDCA U.S. Attorney Ismail J. Ramsey said: “For years, Bilyuchenko and his coconspirators 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. The Department of Justice will work tirelessly to identify cyber criminals, no matter where they are. And Bilyuchenko and his coconspirators will learn that the Department of Justice has long arms and an even longer memory for crimes that harm our communities.”
IRS-CI Chief James C. Lee said: “Cryptocurrency offers a new way for criminals to steal and launder money, but greed and deceit are nothing new. IRS-CI is specially equipped to follow the complex financial trail left by criminals, and we are dedicated to holding those accountable for crimes committed. IRS-CI is proud to stand with our law enforcement partners to announce these indictments.”
FBI Assistant Director in Charge Michael J. Driscoll said: “As alleged in the indictment, the defendants gained unauthorized access to a server used by Mt. Gox to house cryptocurrency wallets. Mt. Gox was the world’s largest bitcoin exchange at the time, and the defendants used their unauthorized access to steal the bulk of the bitcoins held by Mt. Gox customers. The FBI and our partners will continue to work tirelessly to protect the integrity of all of our financial markets.”
USSS Special Agent in Charge William Mancino said: “The Secret Service has a long tradition of pursuing and bringing to justice those who aim to exploit our financial systems and target innocent victims. Working together with our local, state, and federal law enforcement partners, we will continue to investigate criminal organizations that operate in the ever-evolving cyber domain.”
HSI Acting Executive Associate Director Katrina W. Berger said: “Homeland Security Investigations continues to investigate cyber criminals illicitly operating in virtual spaces, and we are proud to have worked collaboratively with our law enforcement partners to bring these two individuals to justice. Our special agents continue to investigate transnational criminal organizations operating in emerging technologies, leveraging our broad authorities to identify and dismantle those behind sophisticated crypto scams.”
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