According to a press release from the U.S. Department of Justice, Alexander Vinnik, a former operator of the BTC-e exchange, has admitted to a conspiracy to launder money. This admission of guilt comes over six years following his arrest in Greece on July 25, 2017. BTC-e’s Vinnik Pleads Guilty to Money Laundering The Department of […]
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Two Russians Charged for Infiltrating Mt Gox and Operating Illicit Crypto Exchange, BTC-e
In a statement issued on Friday, the U.S. Department of Justice (DOJ) revealed that two Russian individuals have been accused of infiltrating a cryptocurrency exchange and running an unlawful exchange. Reportedly, the pair gained unauthorized access to Mt Gox’s servers from 2011 to 2014 and purportedly pilfered 647,000 bitcoins from the now-dissolved exchange.
Russian Duo Accused of Orchestrating Mt Gox Heist and Operating Underground Crypto Exchange
The U.S. government has charged two Russians for breaching Mt Gox and managing the former crypto exchange BTC-e. The defendants, Alexey Bilyuchenko and Aleksandr Verner, are believed by authorities to have collaborated with Alexander Vinnik in running BTC-e.
As stated in the indictment, “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,” remarked Kenneth Polite Jr., the assistant attorney general of the Justice Department’s Criminal Division.
A 2016 indictment was unveiled alongside the press release, revealing more details about the relationship between Mt Gox and BTC-e. The indictment alleges that “Bilyuchenko, Verner, and their co-conspirators” initially accessed Mt Gox in September 2011 and managed to siphon funds from its wallets. “From September 2011 through at least May 2014, Bilyuchenko, Verner, and their co-conspirators allegedly caused the theft of at least approximately 647,000 bitcoins from Mt Gox,” asserts the DOJ.
BTC-e, Alexander Vinnik, and Russian nationals have all been implicated in hypotheses surrounding Mt Gox’s demise long ago. In 2019, reports stated that Russian attorney Alexander Zheleznikov from ZP Legal alleged his firm was aware of who the Russian nationals were and tied Mt Gox to the operators of BTC-e. In their latest discovery, the DOJ claims that the pair worked with an unnamed bitcoin brokerage service, referring to it as the “New York Bitcoin Broker” in the indictment.
A fabricated advertising agreement was allegedly concocted between Bilyuchenko, Verner, and the New York Bitcoin Broker to camouflage and liquidate bitcoins taken from Mt Gox. “Bilyuchenko and Verner supposedly made regular requests to the owner and operator of the New York Bitcoin Broker to transfer large sums into various offshore bank accounts, including those under the names of shell corporations managed by Bilyuchenko, Verner, and their co-conspirators,” details the DOJ’s charges and unveiled court indictment.
What do you think about the DOJ’s charges against the two Russian nationals? Share your thoughts and opinions about this subject in the comments section below.
Dump Incoming? Rogue BTC-e Sends $165 Million In Bitcoin To Personal Wallets And Exchanges
After a year of near dormancy, Bitcoin funds of the rogue exchange BTC-e are on the move again. Chainalysis, an American blockchain analysis firm headquartered in New York City, is reporting that 10,000 BTC, worth about 5 million, have been transferred.
The destination of the transactions are personal wallets, exchange deposit addresses and other services. Remarkably, the transfer is the largest withdrawal since April 2018.
BTC-e was a crypto exchange that was founded in July 2011 and shut down in 2017 as a result of a joint investigation by the U.S. Secret Service and the FBI. According to the allegations, BTC-e was instrumental in laundering money for ransomware attacks.
As NewsBTC reported, security researchers estimated that BTC-e was responsible for 95% of all ransomware payments and their conversion into fiat currencies.
Russian citizen and co-founder of BTC-e, Alexander Vinnik, was also allegedly involved in the theft of 530,000 of the more than 800,000 Bitcoin stolen from Mt. Gox. After serving two years in prison in France, Vinnik was extradited to the U.S. in August.
As Chainalysis notes, BTC-e still held a significant amount of Bitcoin at the time of its shutdown in 2017. In April 2018, BTC-e moved more than 30,000 Bitcoin from its service wallet. About million of that went to the now-sanctioned OTC counter Suex.
BTC-e Fraudster About To Dump Their Bitcoin?
Since then, the fraudulent exchange’s masterminds had been relatively quiet. Only in October 2021, BTC-e sent over 100 Bitcoin worth more than million to personal wallets and eventually to several exchanges “that service Russia and other Eastern European countries,” according to Chainalysis.
Yesterday’s transaction appears to be the tip of the iceberg and a longer-planned move. The fraudsters of BTC-e began withdrawing cryptocurrencies as early as a month ago. On Oct. 26, both BTC-e and its successor exchange WEX sent small amounts of Bitcoin to Webmoney, a Russian electronic payment service.
Then, on November 11, BTC-e conducted a test by indirectly transferring 100 Bitcoin to an exchange. After seemingly being successful, BTC-e pulled of yesterdays big move.
Chainalysis concluded that approximately 9,950 Bitcoin are remaining in personal wallets of the fraudsters, “while the rest was moved through a series of intermediaries to four deposit addresses at two large exchanges. In the case of Exchange 1, depicted above, our analysis suggests a Russian exchange may have served as an intermediary to launder this BTC-e money”.
CryptoQuant CEO Ki Young Ju confirmed that the BTC originate from the criminals linked to the 2014 Mt. Gox hack. “They sent 65 BTC to Hitbtc a few hours ago, so it’s not a gov auction or anything,” he said. Ju urged the exchange to suspend the account due to suspicious activity.
7-year-old 10,000 $BTC moved today.
No surprise, it's from criminals, like most of the old Bitcoins. It's the BTC-e exchange wallet related to the 2014 Mt. Gox hack.
They sent 65 BTC to @hitbtc a few hours ago, so it's not a gov auction or something.https://t.co/6LnCxFAJfX https://t.co/YdPrvJafxY pic.twitter.com/Sp2higUqbq
— Ki Young Ju (@ki_young_ju) November 24, 2022
Thus, in the short term, the BTC-e fraudsters do not appear to be a threat, as they are once again only dumping smaller amounts of BTC. The Bitcoin price, meanwhile, is struggling with the crucial resistance at ,000 USD.
U.S. Seeks Court Judgment Against BTC-e Exchange and Alexander Vinnik
The post U.S. Seeks Court Judgment Against BTC-e Exchange and Alexander Vinnik appeared first on DCEBrief.
Prosecutors File Formal Complaint Against Infamous BTC-e Crypto Exchange
Prosecutors have filed a complaint against the infamous crypto exchange BTC-e calling a haven for crime.
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US Prosecutors Indict BTC-e Crypto Exchange, Seek Millions in Penalties
n U.S. federal prosecutors are going after BTC-e and associated exec Alexander Vinnik due to allegedly facilitating financial crimesn
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Ex-CEO of BTC-e Exchanges Spin-Off WEX Is Arrested in Italy
n Former CEO of now-defunct crypto exchange WEX, a spin-off of controversial BTC-e exchange, was arrested in Italyn
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Alleged BTC-e Operator Alexander Vinnik Seeks Extradition to Russia
Alleged bitcoin launderer Alexander Vinnik, who is wanted by several countries, has filed in Greece for extradition to Russia.
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WEX (Formerly BTC-e) Used to Clean Up to $6 Million From SamSam Ransomware
According to a report by respected accountancy firm PricewaterhouseCoopers (PwC), the individuals behind the SamSam ransomware attack are connected to the controversial cryptocurrency exchange WEX (formerly BTC-e). The Iranian hacker group is believed to have used the platform to launder up to million.
Two of the men identified by the US Department of Justice as being responsible for the SamSam ransomware are Haramarz Shahi Savandi and Mohammad Mehdi Shah Mansouri. PwC identifies both having links to WEX. The SamSam attack of which details were published last September is believed to have cost a total of million.
WEX Linked to “Cleanup” of Ransomware Funds
The PwC report states that criminals are increasingly favouring smaller cryptocurrency exchanges to launder money using Bitcoin or other digital currencies. It attributes this to heightened compliance of “know your customer” and anti-money laundering regulations at larger trading venues. It goes on to suggest that decentralised exchanges, such as those being launched by Binance and other firms, could be used by launderers to evade detection going forward.
One of the smaller exchanges favoured seems to be WEX. Two of the Iranian nationals linked to the SamSam ransomware attack that hit over 200 institutional targets to the tune of over million are believed to have been connected with the exchange. The PwC write:
“We identified this Iranian money laundering operation as having links with currency exchange WEX (previously known as BTC-e)… WEX is most notably known for its alleged involvement in the threat actor tracked by PwC as Blue Athena, and being responsible for cashing out 95 percent of all ransomware payments made since 2014.”
Payment for the release of files encrypted by ransomware attacks like SamSam and WannaCry is often demanded in Bitcoin or another cryptocurrency. This, according to the PwC report is because it is much safer to transact discretely with thanks to its “inherent decentralised and anonymous qualities.”
Although WEX explicitly denies being connected to BTC-e, the two share almost identical layouts and the PwC report states that all the users accounts from BTC-e were transferred over to the WEX platform. BTC-e trading came to an abrupt halt in 2017 following the arrest of Alexander Vinnik, the site’s administrator is suspected of being involved in the laundering of around billion.
The PwC states that it expects to see more examples of the Treasury’s Office of Foreign Assets Control publicly attributing digital currency addresses to individuals as it did with the Iranian nationals in this case. This, it admits, may force the criminals to alter tactics in response.
In concluding, the PwC offered the advice for those impacted by ransomware like SamSam to not pay the ransom. It states that payment merely encourages the attack since it proves its economic validity.
Related Reading: Yes, Criminals Use Bitcoin: They Also Use Cars, Cash, Mobile Phones, and the Web…
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The post WEX (Formerly BTC-e) Used to Clean Up to Million From SamSam Ransomware appeared first on NewsBTC.
Greek Supreme Court Rules to Extradite Alleged BTC-e Owner Alexander Vinnik to Russia
n Alleged BTC-e owner Alexander Vinnik agrees with extradition to his home country of Russia, but the final decision is up to politiciansn
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