The US Department of Justice (DOJ) has announced that it has charged two Russian nationals for their alleged involvement in a series of cyberattacks that targeted bank, e-commerce platforms, and cryptocurrency exchanges around the world.
According to a press release issued by the DOJ on June 9, 2023, the two defendants, Dmitry Kuznetsov and Alexey Petrov, are accused of conducting a sophisticated and coordinated hacking campaign that resulted in losses of over $200 million for victims in more than 20 countries.
The indictment alleges that Kuznetsov and Petrov used various techniques to compromise the security of their targets, such as phishing emails, malware injections, credential stuffing, and web shell attacks. They also allegedly used proxy servers and virtual private networks (VPNs) to conceal their identities and locations.
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The DOJ alleged that Bilyuchenko and Verner gained unauthorized access to a server holding crypto wallets of Mt. Gox in 2011 and transferred the digital assets to bitcoin addresses they controlled. They then used BTC-e, which Bilyuchenko co-founded with another co-conspirator, Alexander Vinnik, to launder the stolen bitcoins for other criminals around the world.
BTC-e was one of the primary ways by which cyber criminals, including ransomware actors, narcotics rings, and corrupt public officials, transferred, laundered, and stored their illegal proceeds. The exchange operated without any anti-money laundering or customer verification procedures and allowed users to exchange fiat currencies and cryptocurrencies anonymously.
The U.S. law enforcement shut down BTC-e in 2017 and arrested Vinnik in Greece. He was extradited to the U.S. in 2022 and pleaded guilty to money laundering charges. Bilyuchenko and Verner remain at large.
The DOJ said that the two Russians “stole a massive amount of cryptocurrency from Mt. Gox, contributing to the exchange’s ultimate insolvency” and that they “operated a digital currency exchange that enabled criminals around the world to launder billions of dollars.”
The indictments are part of the DOJ’s efforts to crack down on cybercrime and illicit use of cryptocurrencies. The agency recently seized two domains that directed users to a darknet cryptocurrency mixer that allowed criminals to launder more than $3 million of digital assets.
The Mt. Gox hack remains one of the most notorious cases of crypto theft and fraud, and its impact is still felt today by many investors who lost their funds. The DOJ’s charges against the two Russians are a significant step towards bringing them to justice and recovering some of the stolen bitcoins.
The DOJ claims that the defendants stole personal and financial information from millions of users, including names, email addresses, passwords, credit card numbers, bank account details, and cryptocurrency wallet keys. They then allegedly used this information to access victims’ accounts and transfer funds to accounts under their control.
The indictment also alleges that Kuznetsov and Petrov laundered the proceeds of their illicit activities through various cryptocurrency platforms and services, some of which they operated themselves. They also allegedly exchanged stolen cryptocurrency for fiat currency using peer-to-peer platforms and money mules.
The DOJ says that it has seized over $100 million worth of cryptocurrency and other assets from the defendants and their associates as part of its investigation. It also says that it has worked closely with law enforcement agencies from several countries, including the UK, France, Germany, Japan, South Korea, and Australia, to identify and apprehend the suspects.
The two defendants are currently in custody in France and Japan, respectively, pending extradition to the US. They face multiple charges of conspiracy, computer fraud, wire fraud, identity theft, and money laundering. If convicted, they could face up to 20 years in prison for each count.
The DOJ’s announcement comes amid growing concerns about the threat posed by cybercriminals to global security and stability. In recent months, several high-profile cyberattacks have disrupted critical infrastructure and services in various sectors, such as energy, transportation, health care, and education.
The DOJ says that it is committed to pursuing and prosecuting those who engage in cybercrime and harm innocent victims. It also urges individuals and organizations to take preventive measures to protect their online security and privacy.