Volodymyr Kvashuk, 25 years old and a former Microsoft employee, was arrested this week on charges of bitcoins theft for an amount of $10 million.
The western district of Washington suspects that the Ukrainian resident then used a bitcoin mixer to cover his tracks.
The purchase of gift vouchers
Kvashuk, former head of Microsoft’s online sales platform, was tasked with testing customer purchases in a simulated environment. However, the test environment only prevented physical deliveries but did not prevent the purchase of gift certificates.
The programmer took advantage of this bug by using the company’s funds to buy gift cards. He then resold them online for bitcoin. The accusation states that Volodymyr Kvashuk used the money to buy a $160,000 Tesla vehicle and a $1.6 million lakeside house.
Initially, he started stealing amounts of less than $10,000 in counter value using his account. Subsequently, he also used some test accounts associated with other employees to increase his loot. Kvashuk then attempted to mask the evidence that would lead to fraud and the sales on the Internet.
The former Microsoft developer used a bitcoin mixer service in an attempt to hide the source of the funds that eventually went into his bank account.
In total, in the seven months of Kvashuk’s illegal activity, about $2.8 million were transferred to his accounts.
Using the bitcoin mixer
Bitcoin is not completely anonymous, contrary to what can be read in some non-specialised media.
With a blockchain explorer, it is quite easy to track transaction movements. Thanks to the Know Your Customer (KYC) required on most exchanges, it is possible to identify the actual end-user.
A bitcoin mixer, such as the Wasabi wallet, mixes the bitcoins it receives with other users’ bitcoins and then returns the same amount of coins that will be laundered and randomised and therefore much more difficult to track.
However, the use of this system has not been sufficient for Volodymyr Kvashuk to elude the investigations of the relevant authorities.