Regulation
DOJ cracks down on crypto-related money laundering
The US Department of Justice (DOJ) has stepped up its crackdown on international money laundering. Authorities have charged Maximilien de Hoop Cartier, allegedly linked to the Cartier family, with laundering drug proceeds through cryptocurrency.
In a parallel development, Alexander Vinnik, operator of crypto exchange BTC-e, pleaded guilty to laundering more than $9 billion. These efforts illustrate the DOJ’s intensified efforts against financial crimes involving digital currencies.
Cartier heir embroiled in multimillion-dollar laundering plot
On May 2, the DOJ indicted Maximilien de Hoop Cartier and five Colombian nationals for their involvement in money laundering, drug trafficking proceeds between the United States and Colombia using cryptocurrency. Claiming descent from the prestigious Cartier family, Maximilien is arrested in Miami. He now faces a series of serious charges.
Officials charged him with conspiracy to commit money laundering and engaging in money laundering activities, with each charge carrying a potential prison sentence of twenty years. Cartier also faces a charge of bank fraud, which could result in up to thirty years in prison.
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Additionally, authorities accused him of conducting a monetary transaction on property from specific illegal activities, which could result in a ten-year sentence. Finally, the DOJ also charged Cartier with operating an unlicensed money transmitting business, which could result in a five-year prison sentence.
Cartier allegedly converted drug proceeds into the Tether stablecoin then in US dollars. He used a network of shell companies and bank accounts in the United States for these unlicensed transactions. This system involved running an unlicensed over-the-counter cryptocurrency exchange.
U.S. Attorney Damian Williams expressed his thoughts on the case. He praised the hard work of law enforcement and prosecutors in the Bureau. in the fight against money laundering and drug trafficking in the case of Cartier.
“Cartier is further accused of committing a series of financial crimes while working with this money laundering network, resulting in illegal transactions worth hundreds of millions of dollars . I applaud the efforts of our law enforcement partners and career prosecutors in this Office who work tirelessly to investigate and dismantle these money laundering and drug trafficking networks. We will relentlessly continue to protect the U.S. financial system from exploitation,” Williams said. said.
In addition to Cartier, several Colombian nationals face serious charges in this case. The DOJ charged Leonardo de Jesus Zuluaga Duque with conspiracy to launder money and import more than five kilograms of cocaine into the United States. These offenses could result in a life sentence.
Likewise, Alexander Areiza Ceballos and Adrian Fernando Areiza Ceballos are charged with conspiring to import more than five kilograms of cocaine into the United States. This charge carries a mandatory minimum sentence of 10 years and could lead to life imprisonment.
Authorities also implicated Erica Milena Lopez Ortiz and Felipe Estrada Echeverry. They are both charged with conspiracy to commit money laundering, a crime punishable by up to 20 years in prison.
BTC-e exchange operator pleads guilty
Beyond the history of Cartier, another major development highlights the complexity of global money laundering. On May 3, DOJ officials announced that Alexander Vinnik, associated with BTC-e, had confessed to his involvement in a major money laundering operation.
BTC-e was once a notable player in the crypto exchange industry. The DOJ highlighted that BTC-e has processed over $9 billion in transactions. Additionally, it served as a financial hub for cybercriminals, ranging from ransomware profiteers to drug traffickers.
Additionally, BTC-e failed to meet U.S. regulatory standards, including anti-money laundering and customer identification requirements. This failure has made it a preferred platform for the anonymization of illicit products.
In discussing Vinnik’s case, Deputy Attorney General Lisa Monaco highlighted the international effort required to deal with such complex operations. She also highlighted the global collaboration needed to dismantle sophisticated projects.
“This guilty plea reflects the Department’s continued commitment to using all tools to combat money laundering, control crypto markets and recover damages from victims,” Monaco added.
This announcement followed a report from BeInCrypto, which detailed the accusations made by the DOJ. against Aliaksandr Klimenka, national of Belarus and Cyprus. Officials alleged that he became involved in a complex money laundering scheme through BTC-e. An indictment released in February said that Klimenka, alongside Vinnik, managed BTC-e from 2011 until its closure in July 2017.
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The recent actions against Cartier and Vinnik demonstrate the unwavering dedication of the Department of Justice. These efforts aim to protect the U.S. financial system from exploitation by high-level international money launderers.
Indeed, cryptocurrency is commonly associated with money laundering by authorities around the world. However, recent research from Chainalysis in 2023 shows a notable decline in illicit cryptocurrency transactions. Illicit addresses sent $22.2 billion to services, up from $31.5 billion in 2022.
Total money laundering in cryptocurrencies (2019 – 2023). Source: On-Chain Analysis
Contrary to the perception that cryptocurrencies are primarily used for money laundering, the US Treasury Department report strong points that criminal organizations favor traditional cash transactions for such activities. This finding indicates a lower risk associated with cryptocurrency in money laundering compared to conventional methods.
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