A London firm called Always Efficient LLP has become entangled in an investigation into laundering bitcoin stolen from Mt Gox, the Tokyo exchange that collapsed in 2014. According to BBC Radio 4, the
A London firm called Always Efficient LLP has become entangled in an investigation into laundering bitcoin stolen from Mt Gox, the Tokyo exchange that collapsed in 2014. According to BBC Radio 4, the company's ownership remains unclear, and its registered address in east London houses multiple other firms.
The company operated BTC-e, a cryptocurrency exchange that U.S. authorities shut down last July. Prosecutors charged Russian national Alexander Vinnik and BTC-e with 21 counts of conducting an alleged international money laundering scheme. They alleged the exchange helped funnel stolen Mt Gox funds.
Mt Gox's history is well-known in crypto circles. The exchange launched in 2010 and grew so large that by 2013 and 2014 it was processing 70 percent of global bitcoin trades. CEO Mark Karpelès discovered in February 2014 that 850,000 bitcoin had vanished. The firm filed for bankruptcy. By April, liquidation had begun. Some of the missing coins later turned up: 200,000 bitcoin were recovered in March 2014. But 650,000 remain unaccounted for.
Karpelès spoke with BBC Radio 4 about the ordeal. When the exchange stopped trading and customers could not access their money, he felt he was 'about to die'. "Mt Gox went from interesting project to being, I would say, a daily nightmare of dealing with banks, governments, people I never knew existed," he said.
Law enforcement traced at least some of the stolen coins to BTC-e. Duncan Hames, who works for Transparency International, described the money laundering mechanism. "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," Hames said. "They simply enable a series of transactions to take place to create this distance and to obscure the trail of the proceeds of crime."
Karpelès faced charges too. Police arrested him in 2015 and charged him with fraud and embezzlement over transactions worth $2.3 million. He was also charged with manipulating data, though that carried no connection to the missing 650,000 bitcoin. He has said he cooperates with investigators trying to recover the funds.
The recovered coins sit in legal limbo. Japanese bankruptcy law assigned them a value of $483 apiece, the price on the day trading halted. Bitcoin's price now stands at $10,600. Investors are pushing for compensation at the current market price, not the bankruptcy valuation. A court should rule within months.
