Wednesday, February 8, 2023

Arrested Vinnik a Chief Suspect in Mt Gox and Other Bitcoin Thefts

Arrested Vinnik a Chief Suspect in Mt Gox and Other Bitcoin Thefts

Alexander Vinnik, the Russian man arrested in Greece and accused of laundering over $4 billion USD in bitcoin, is also the prime suspect in the 600,000+ bitcoin Mt. Gox theft. That’s according to a blockchain investigator who’s spent three years working on the case.

Also read: Russian Arrested for Allegedly Leading BTC-e Money Laundering Ring

Investigator: Vinnik Has Long Been Our Main Gox Suspect

The latest revelations suggest Vinnik also played a part in infamous thefts at Bitcoinica, Bitfloor and others in the earlier days of Bitcoin. However, none of these thefts were mentioned in Vinnik’s list of charges today, which mainly concern money laundering.

Kim Nilsson of Bitcoin security firm WizSec posted the news on his website. He said Vinnik, who Reuters reported is also be a senior figure at popular exchange BTC-e, has long been the main suspect in the Gox case.

“We won’t beat around the bush with it: Vinnik is our chief suspect for involvement in the MtGox theft (or the laundering of the proceeds thereof). This is the result of years of patient work, and these findings were surely independently uncovered by other investigators as well.”

Vinnik’s arrest and charges hopefully mean WizSec can reveal more details of its research since 2014, Nilsson added. He and his colleagues performed in-depth analysis on publicly-revealed Mt. Gox data records and have long claimed to have a suspect. However they were unable to reveal the information publicly, to avoid jeopardizing any law enforcement operations.

Why WizSec Suspects Vinnik

WizSec’s report goes into detail about how Mt. Gox’s bitcoins may have ended up in Vinnik’s possession.

Kim Nilsson, WizSec
Kim Nilsson, WizSec

Someone stole Mt. Gox’s hot wallet keys as far back as 2011, draining the funds intermittently and in differing amounts between then and 2013. The thief had taken 630,000 BTC by mid-2013 — when Gox was still the world’s most popular exchange.

WizSec identified the receiving wallets as belonging to Vinnik. Over 300,000 coins went to BTC-e, with some going direct to that exchange’s internal stories. This suggests Vinnik was involved with the company, rather than just a customer.

Ironically, the thief even deposited some of the stolen coins back to Mt. Gox. It was this detail that enabled Nilsson to link the coins to online identity “WME”, known to be Vinnik.

WME, a long-time poster on bitcoin message boards like BitcoinTalk, had a history of offering to trade “cheap coins” and exchange money codes. Although WizSec’s investigation linked WME to an “Alexander Vinnik”, they originally thought it was an alias.

Nilsson promised more details on how WizSec tracked Mt. Gox’s missing funds in the coming days.

Vinnik Could Hold Answers to Several Bitcoin-Related Mysteries

Vinnik may be a central figure in a number of ongoing bitcoin-related crimes and other mysteries. If he was indeed a hub that received and processed billions of dollars in ill-gotten BTC gains, he could potentially hold information pertinent to numerous other crimes.

Bitcoinica logoLong before Mt. Gox gained worldwide notoriety, bitcoin traders lost thousands of coins in thefts at the Bitcoinica and Bitfloor exchanges. These crimes remained unsolved.

The BTC-e site went down on 26th July, citing “unscheduled maintenance”. An update on Twitter added the site will remain offline for 5-10 days.

BTC-e has operated since 2011. Although it is one of the world’s most popular cryptocurrency exchanges, its operators have remained anonymous and it does not comply with international KYC/AML requirements.

Its exact location has never been revealed, but it was always reported to be in the Greece/Cyprus region. BTC-e’s main site interface and its social media posts are in Russian and English.

Could these revelations have a serious impact on Bitcoin? Let’s hear your thoughts.

Images via Alexandros Avramidis/Reuters, Jon Southurst

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