Ex Microsoft employee Volodymyr Kvashuk was arrested this week amid allegations of digital currency theft to the tune of $10 million. U.S. attorneys for the Western District of Washington suspect the Ukrainian-born resident used a Bitcoin mixer to cover up his tracks.
Kvashuk, who was in charge of the companies online sales platform, was entrusted to test customer purchases in a simulated environment. The test environment only blocked physical deliveries, however, and the security team failed to prevent purchases of gift cards.
The talented engineer quickly took advantage of this flaw using company funds to buy Bitcoin-denominated gift cards. He subsequently resold them online to fund an extravagant lifestyle:
The complaint alleges KVASHUK resold the value on the internet, using the proceeds to purchase a $160,000 Tesla vehicle and a $1.6 million dollar lakefront home.
What is a Bitcoin Mixer?
Bitcoin is not fully anonymous, thanks in large part, to widespread reporting on mainstream media. It’s fairly easy to follow the money via a Bitcoin blockchain explorer. That and Know Your Customer (KYC) laws on fiat exchanges makes it a lot harder to commit fraud.
A Bitcoin mixer, also known as a Bitcoin tumbler, is designed to confuse spying eyes. You send your Bitcoin to a third party, it mixes them with a number of other users’ coins and supposedly returns the same amount of now randomized coins.