US prosecutors have fingered two Russian nationals as the masterminds behind the 2011 hack of Mt. GoxMt. GoxMt. Gox is the name of a Japan-based cryptocurrency exchange...Read this Term, the largest Bitcoin (BTC) exchange in the world at the time. The Department of Justice (DOJ) in an indictment unsealed on Friday, charged Alexey Bilyuchenko, 43, and Aleksandr Verner, 29, with conspiracy to launder about 647,000 bitcoins following their hack of the exchange.

DOJ Indicts Two Russian Nationals

According to the prosecutors, Bilyuchenko and Verner stole the vast majority of bitcoins belonging to Mt. Gox customers between September 2011 and at least May 2014. This contributed to the eventual shut down of the platform in February 2014.

The DOJ in a statement unsealed charges against both Russian nationals in both New York and California, following ongoing multi-agency investigation into the case. This is even as the prosecutor accused Bilyuchenko of partnering with Alexander Vinnik to run another defunct Bulgaria-based cryptocurrency exchangeCryptocurrency ExchangeA cryptocurrency exchange is an online platform that supports t...Read this Term, BTC-e, with ‘ill-gotten gains’ from his Mt. Gox hack.

BTC-e, according to the prosecutor, for years aided criminals across the world, ‘to launder billions of dollars.’ These included computer hackers, ransomware actors, narcotics rings and corrupt public officials.

How Mt. Gox’s Stolen Bitcoins Were Moved: DOJ

According to the DOJ, Mt. Gox kept its customers’ crypto wallets and private keys on a computer server in Japan. However, after Bilyuchenko, Verner and their accomplice allegedly stole some of the bitcoins, they laundered most of them through their accounts at two other online BTC exchanges.

Furthermore, the DOJ claimed that Bilyuchenko, Verner and others as part of a device to launder the Bitcoin sometime in April 2012 entered into a so-called advertising services contract with a New York-based bitcoin brokerage. The firm allegedly helped the accused to hide and liquidate bitcoins their stolen bitcoins by making wire transfers of about $6.6 million to oversea bank accounts they controlled and those in the names of shell companies.

[ In exchange for the wire transfers, the New York Bitcoin Broker allegedly received ‘credit’ on Exchange-1, through which Bilyuchenko, Verner, and their co-conspirators allegedly laundered more than 300,000 of the bitcoins stolen from Mt. Gox,]  DOJ noted, explaining its indictment.