A former Microsoft engineer has been found guilty of 18 federal felonies after stealing $10m (£7.7m, €9m) worth of digital assets.

25-year-old Ukraine-born Volodymyr Kvashuk from Washington state, US, took advantage of his position testing Microsoft’s online retail sales platform to steal digital gift cards which he then resold online.

While the scale of the thefts was initially small, Kvashuk scaled up his activity. When arrested the former engineer was living in a $1.6m lakefront house and drove a $160,000 Tesla.

In an effort to conceal his activity Kvashuk used a Bitcoin mixing service. According to his tax returns, he claimed that a transfer of roughly $2.8m worth of Bitcoin (BTC) that appeared in his account as a gift from a relative.

Nonetheless, Microsoft grew suspicious of their employee and fired Kvashuk in June 2018. The US Department of Justice was able to prove his deception despite his efforts at obfuscation.

Special Agent Ryan L Korner of the Internal Revenue Service (IRS) stated: “In addition to stealing from Microsoft, Volodymyr Kvashuk also stole from the government by concealing his fraudulent income and filing false tax returns.” Kormer added: “Criminals who think they can avoid detection by using cryptocurrency and laundering through mixers are put on notice… you will be caught, and you will be held accountable.”

Such comments come after regulators and prosecutors intensify their approach to crypto-related fraud and crime. However, the privacy afforded by digital assets can sometimes hinder authorities even after an individual has been found guilty.

Last week it emerged that the Irish state is currently unable to access more than €50m worth of Bitcoin seized from a Dublin drug dealer, Clifton Collins had written the access code for his stash on a piece of paper which he then hid in his fishing cap. In the course of the arrest and investigation the Irish authorities unknowingly destroyed this key piece of information.

Kvashuk is due to be sentenced in June and faces up to 20 years in prison.

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