Wallets tied to Aleksey Bilyuchenko moved 1,300 Bitcoins worth about $114 million to unidentified platforms over the past week, according to Arkham analyst Emmett Gallic.
Aleksey is connected to the Mt. Gox breach and the operation of BTC-e, and these same wallets still control 4,100 Bitcoins valued near $360 million, while 2,300 Bitcoins have already been sold as of press time.
This latest development adds to a case that stretches back more than a decade, as Aleksey faces U.S. charges tied to the laundering of crypto connected to these historic exchange crimes.
BTC-e handled billions while running outside U.S. rules
The US Secret Service records from June 7, 2023 said Aleksey worked with Alexander Vinnik and others to operate BTC-e from 2011 until its shutdown by US DOJ in July 2017.
During those 6 years, BTC-e was one of the world’s largest crypto exchanges, serving more than one million users worldwide.
Prosecutors say BTC-e received proceeds tied to computer intrusions, hacking incidents, ransomware events, identity theft schemes, corrupt public officials, and narcotics distribution rings. The exchange operated without a license and without required controls.
Aleksey is charged with money laundering conspiracy and operating an unlicensed money services business, according to court filings by the DOJ.
From September 2011 through at least May 2014, the group caused the theft of roughly 647,000 Bitcoins, which is most of the Bitcoins held for Mt. Gox customers.
Prosecutors say that the stolen Bitcoin was laundered mainly through addresses linked to accounts Aleksey and his group controlled at two other online exchanges identified in the filings as Exchange-1 and Exchange-2, along with a specific Mt. Gox user account.
In April 2012, Aleksey and Verner negotiated a fraudulent Advertising Contract with a Bitcoin brokerage based in the Southern District of New York. Under the contract, the brokerage made large wire transfers to offshore bank accounts, including accounts held by shell companies controlled by the group. Between March 2012 and April 2013, the broker sent more than $6.6 million overseas.
In return, the brokerage received credit on Exchange-1. Through that access, the group laundered more than 300,000 Bitcoins taken from Mt. Gox. The Advertising Contract served as a cover that allowed the stolen Bitcoin to be concealed and liquidated.
Former U.S. Attorney Damian Williams said, “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.”
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