{"id":407247,"date":"2018-03-07T06:35:22","date_gmt":"2018-03-07T06:35:22","guid":{"rendered":"http:\/\/citifmonline.com\/?p=407247"},"modified":"2018-03-07T06:35:22","modified_gmt":"2018-03-07T06:35:22","slug":"uk-company-linked-laundered-bitcoin-billions","status":"publish","type":"post","link":"https:\/\/citifmonline.com\/?p=407247","title":{"rendered":"UK company linked to laundered Bitcoin billions"},"content":{"rendered":"

A UK company has been linked to the laundering of 650,000 stolen bitcoins worth \u00a34.5bn, a\u00a0BBC Radio 4\u00a0investigation has found.<\/p>\n

The coins were taken by hackers from Tokyo-based Bitcoin exchange Mt Gox, leaving tens of thousands of customers out of pocket.<\/p>\n

It’s not clear who is in control of the London-based firm Always Efficient LLP.<\/p>\n

Mt Gox operator Mark Karpeles apologised to investors and said he was co-operating with the investigation.<\/p>\n

The FBI has charged a Russian national with laundering the stolen bitcoins.<\/p>\n

Mt Gox matched up those who wanted to buy the crypto-currency with dollars, pounds and other international denominations with those wanting to sell bitcoins, and handled an estimated 70% of the world’s Bitcoin trade.<\/p>\n

The exchange was originally set up to trade cards from a game set in a world of wizards, spells and monsters. When it turned its focus to crypto-currencies, it appeared to be a huge success story.<\/p>\n

Almost half of Bitcoin trading is done in Japanese yen, and there’s even a Japanese girl group, the Virtual Currency Girls, which reflects Japan’s growing craze for virtual money.<\/p>\n

\"The<\/span><\/figure>\n

But a group of amateur investigators, WizSec, found that hackers had targeted Mt Gox.<\/p>\n

They had systematically pilfered users’ accounts, hiding their tracks from Mt Gox operators for years.<\/p>\n

And in 2014, the site’s chief executive, Mark Karpeles, made the horrifying discovery that hundreds of thousands of coins were missing.<\/p>\n

When customers found themselves unable to withdraw funds, the site collapsed.<\/p>\n

Speaking for the first time about the collapse to\u00a0BBC Radio 4’s File on Fourprogramme, Mr Karpeles said: “It felt like\u2026 when you fall from a building and you see the ground getting closer, and you feel like you are about to die.”<\/p>\n

He said the site had rapidly grown beyond his expectations.<\/p>\n

“Mt Gox went from interesting project to being, I would say, a daily nightmare of dealing with banks, governments, people I never knew existed.”<\/p>\n

How the coins had gone missing was initially a mystery.<\/p>\n

But now investigators say almost half the stolen coins from Mt Gox ended up at rival exchange BTC-e.<\/p>\n

‘Cyber-crime hub’<\/strong><\/p>\n

The FBI says BTC-e was a hub for cyber-crime and helped to launder money from hacks, including ransomware attacks of the kind that hit the NHS and other organisations last year.<\/p>\n

But trying to find out who operates BTC-e isn’t easy. The exchange claimed to be operated by a British company called Always Efficient LLP.<\/p>\n

Always Efficient’s registered office is in east London, but the address is shared by several other firms, some of which are thought to be involved in money laundering.<\/p>\n

Duncan Hames, of anti-corruption group Transparency International, said it’s likely to be a shell company.<\/p>\n

“People laundering money will set up a network of companies to create layers between the original crime and their attempts to then integrate the proceeds of their crime into the economy,” he said.<\/p>\n

“They simply enable a series of transactions to take place to create this distance and to obscure the trail of the proceeds of crime.”<\/p>\n

\"French<\/span><\/figure>\n

In an attempt to regulate these so-called shell companies, new rules introduced in June 2016 now stipulate that companies must publish a list of “persons with significant control” (PWSC).<\/p>\n

Always Efficient doesn’t currently have a PWSC. The person most recently listed, Alexander Buyanov, is a DJ in a Moscow nightclub.<\/p>\n

According to Andrei Zakharov, a Russian journalist who tracked him down, Mr Buyanov claims he “knew nothing” of the business.<\/p>\n

Companies House told the BBC it had a dedicated team dealing with PWSCs, and took action when irregularities were identified.<\/p>\n

‘Real risk’ to UK<\/strong><\/p>\n

The FBI says the man behind BTC-e is another Russian national, Alexander Vinnik.<\/p>\n

Documents seen by the BBC detail how the stolen Mt Gox money was laundered through various accounts, usernames and email addresses allegedly controlled by Mr Vinnik.<\/p>\n

Mr Vinnik was arrested while on holiday in Greece in July 2017, and is currently being detained in Thessaloniki.<\/p>\n

\"Bitcoin<\/span><\/figure>\n

The US Department of Justice now wants to extradite him to face 21 counts of money laundering and other financial crimes in the US.<\/p>\n

Mr Zakharov said: “They were on the beach and his wife was swimming, and when she turned back she saw a lot of people with sunglasses near her husband, and that’s how he was arrested.”<\/p>\n

Russia has also filed an extradition request for Mr Vinnik on lesser, unrelated charges.<\/p>\n

The Greek government is now in the process of deciding between the two requests.<\/p>\n

Via his lawyer, Mr Vinnick told the BBC he denies having any connection to Always Efficient.<\/p>\n

He added: “BTC-e is just a web platform for buying and selling Bitcoin – not an exchange. As such it cannot be held responsible for the source of money used to buy Bitcoin, no more than a bureau du change can be held responsible for exchanging a stolen $100 note into pounds sterling.”<\/p>\n

A National Crime Agency (NCA) spokesman said it didn’t “routinely confirm or deny investigations” but recognised “the very real risks to the UK and the UK’s financial sector from large-scale, complex money laundering.”<\/p>\n

He added: “Tackling money laundering is a high priority for the NCA, and we have a number of national and international operations running against the criminals involved, working in close partnership with partners in law enforcement and financial regulation.”<\/p>\n

Mark Karpeles was arrested and charged with embezzlement related to payments worth \u00a31.7m. He says these were legitimate loans signed off by an accountant.<\/p>\n

He’s also charged with manipulation of data. He denies all the charges – none of which relates to the loss of the 650,000 bitcoins.<\/p>\n

He told the BBC he was doing all he could to return funds to customers and added: “I am very sorry that when I was in charge things happened the way they did.”<\/p>\n

‘Unprecedented’ rise<\/strong><\/p>\n

Mt Gox is not the only Bitcoin currency exchange to be hacked. Even the Virtual Currency Girls have lost money following another recent Bitcoin exchange theft.<\/p>\n

Under Japanese bankruptcy law, the remaining 200,000 Mt Gox bitcoins are valued at \u00a3300 each, the price they held when the exchange collapsed in 2014.<\/p>\n

Since then, the value has increased to around \u00a37,000 each.<\/p>\n

Many investors are now pushing to see their Mt Gox bitcoins refunded at the current price, and a decision is expected within the next few months.<\/p>\n

So regardless of the outcome in Mr Vinnik’s case, Mt Gox creditors who lost out might still turn a profit, thanks to Bitcoin’s unprecedented rise.<\/p>\n

–<\/p>\n

Source: BBC<\/p>\n","protected":false},"excerpt":{"rendered":"

A UK company has been linked to the laundering of 650,000 stolen bitcoins worth \u00a34.5bn, a\u00a0BBC Radio 4\u00a0investigation has found. The coins were taken by hackers from Tokyo-based Bitcoin exchange Mt Gox, leaving tens of thousands of customers out of pocket. It’s not clear who is in control of the London-based firm Always Efficient LLP. […]<\/p>\n","protected":false},"author":14,"featured_media":407250,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"jnews_social_meta":[],"jnews_override_counter":[],"footnotes":""},"categories":[106],"tags":[9776,798],"class_list":["post-407247","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology","tag-bitcoin","tag-uk"],"_links":{"self":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts\/407247","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=407247"}],"version-history":[{"count":0,"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts\/407247\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/media\/407250"}],"wp:attachment":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=407247"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=407247"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=407247"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}