UK firm linked with the hacked coins from Mt Gox

BTC-e could be supporting money laundering

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A UK firm is being linked with 650,000 of Bitcoins stolen from Tokyo based Mt Gox worthy 4.5 billion Euros. This hack left the exchange bankrupt with customers losing all their investments. Mark Karpeles has been apologizing to customers stating that he was cooperating with the investigation. It’s however not clear who owns the London based firm called Always Efficient LLP. There have been several arrests before with the FBI charging a Russian national over the stolen coins.

Before the hack, Mt Gox was one of the biggest exchanges in the world handling nearly 70% of the world’s Bitcoin trade. The company was originally formed to trade cards from a game set, but when it turned into cryptocurrencies, it became a huge exchange.

Japan seems to have become a target for hackers since the country controls Bitcoin trading. It’s estimated that more than half of Bitcoin is traded in Japanese Yen. In 2014 a group of investigators revealed that hackers were targeting Mt Gox. This was before the CEO Karpeles made an announcement that thousands of coins could not be traced.

Soon customers discovered that they could not make withdrawals and therefore the site collapsed. In an interview, Karpeles stated that: Mt Gox moved from being a very interesting project to becoming a nightmare to banks, governments and even many people.” Initially, the hack was a mystery, but after investigation, it was established that more than half of the stolen coins were transferred to rival exchange BTC-e owned by a UK firm.

According to FBI report, BTC-e was a breeding place for cybercrime and has in several times helped to launder money from hacks. They are also said to support ransomware attack similar to the one that hit NHS. The problem is that identifying who operates BTC-e is not simple. However, it believes that it’s owned by a UK firm called Always Efficient LLP.

Always efficient has an office in east London but its address is shared by several companies. Buncan Hames from Transparency International said it was likely to be a shell company: “People involved in money laundering set up a network of companies so as to create a layer from the original crime. In most cases, they enable a series of transactions to take place so that there is a distance to abstract the trail of the proceeds of crime.” He said.

It’s also said that BTC-e is also in partnership with Alexander Vinnik who is said to have initiated the hack. Vinnik was arrested in Greece in July 2017 and is detained in Thessaloniki. Vinnik’s lawyer has however denied any connection with BTC-e. He said:

“BTC-e is a web platform that enables buying and selling of Bitcoin. It’s not an exchange.”

UK’s national crime urgency stated that such links were a huge risk to UK and UK’s financial sector. NCA believes that tackling money laundering should be a priority and all agencies should deal with the criminals involved.

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