The global nature of bitcoin and money is in full display today following an announcement by New Zealand they have seized about $100 million that belonged to Alexander Vinnik, a man who Mark Karpeles has called the MT Gox hacker.
“New Zealand Police has worked closely with the Internal Revenue Service of the United States to address this very serious offending,” said Police Commissioner Andrew Coster (pictured), further adding:
“These funds are likely to reflect the profit gained from the victimisation of thousands, if not hundreds of thousands, of people globally as a result of cyber-crime and organised crime.”
A hack that was initially thought to be for 950,000 bitcoins affected 10,000 creditors across the globe, at least four of them very tragically so.
Blockchain analysis led to the discovery of 200,000 bitcoins back in 2014, with those still awaiting distribution six years on after some fiat conversions, leaving 135,000 in bitcoins held by the MT Gox trustee.
Now some of the rest of the bitcoins themselves may have gone, but to who and to what dollars is part of a global investigation that has had its very first success in ever seizing money from hacked bitcoins. A local paper says:
“The New Zealand police case will rely on the evidence gathered by the United States, including the allegation Vinnik received funds from the notorious hack, or computer intrusion, of Mt Gox…
More than half of the stolen bitcoin were sent to three separate, but linked, BTC-e accounts, including one allegedly controlled by Vinnik.”
BTC-e was a crypto exchange that developed a somewhat whispered reputation for being so shady, you could trust them to not exit scam.
A different sort of not quite exit nor a scam did come to the exchange after its alleged founder, Vinnik, was arrested in Greece with the domain of the exchange, but not the servers, seized.
Legal battles led to his extradition to France, presumably because that’s a somewhat neutral jurisdiction and is also the birth place of Karpeles, the former MT Gox owner.
A leak last year suggested 30,000 MT Gox bitcoins are in the hands of the Russian government which apparently was also trying to get the databases of BTC-e.
There was some Russian law firm that, reading between the lines, probably tried to basically get this 30k on the hands of the MT Gox creditors but the roundabout way they went about it probably led the Japanese trustee to not quite go forward.
The Russian government however in that leak was clearly of the view BTC-e had a lot more coins than these 30,000, but as this $100 million may show perhaps a lot of these coins have been turned into fiat some time ago.
That makes estimates difficult regarding how much MT Gox creditors may get back in addition to the 200,000 bitcoins.
That’s because the first hack was as far back as 2011, with Karpeles just this month revealing a somewhat famous 1fee address holds 80,000 bitcoins that were hacked from MT Gox.
That means then generally the whereabouts of all of these one million bitcoins are known, with intelligence officers seemingly cooperating globally on this matter regardless of what geopolitical or political differences there may be between their countries because this is a matter that affects decent and often very smart citizens in Russia and America, China and Europe, and everywhere else.
Which makes all this an astonishing story as those gox users may get back not just a lot of digital gold coins but also quite a bit of fiat depending on when the haxors sold.
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