Robert Steinadler, 4 months ago

A trace on the blockchain: 10,000 Bitcoin related to Mt. Gox on the move

In 2014 Mt. Gox which was the biggest Bitcoin exchange world wide at that time went bankrupt. The aftermath was a disaster since the platform got hacked earlier and an amount of 744,408 BTC left a gigantic hole in the company’s balance sheet. Over 8 years later some of these stolen coins are all of a sudden on the move.

Why are 10,000 BTC on the move and what is happening to these funds?

The trace leads back to BTC-e

The stolen funds from Mt. Gox could be traced back to another exchange that was founded and operated by Alexander Vinnik, a Russian national. Vinnik and BTC-e came under scrutiny in 2017 when law enforcement traced stolen funds to the exchange and shut it down. Vinnik was arrested and three years later extradited to the US. He was prosecuted for money laundering and was sentenced to 5 years in jail in 2020.

Two years later somehow a nice chunk of the stolen coins is on the move again and blockchain analysis shows that the Bitcoin addresses are connected to Mt. Gox as well as to BTC-e. Who is moving 10,000 BTC in the middle of day with the whole world watching? All of the involved addresses are well known and constantly monitored.

Hackers cashing out using a Russian service

It seems that whoever is controlling these coins is moving them to a payment provider in Russia and is making bank on the stolen BTC. Many spectators voiced their opinions on the case pointing out that the alleged hackers missed the all-time high by far.

Taking the price into account when the funds were stolen, the account holder acquired those BTC at a price level of about $300 and is now selling for over 5,000 % profit. Not too bad, but still far less than what the criminals might have gained one year ago.

It is still unclear why the coins are moved right now and there several theories why this is happening. One explanation is that the owner of that account has to split the BTC and launder it through different services that are mainly situated in Russia. All legitimate services would freeze the funds immediately upon arrival and would also require a KYC check when opening an account. It is possible that it will take several years to move all funds involved and with advanced regulation as well as blockchain analysis there is even a chance that the coins will become useless at some point. This is yet another example that crime and blockchain technology don’t go well with each other.

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