Bitcoin
Russian BTC-e Cryptocurrency Exchange Operator Pleads Guilty to Money Laundering
May 7, 2024EditorialCryptocurrency / Cybercrime
A Russian operator of a now-dismantled BTC-e cryptocurrency exchange pleaded guilty to money laundering charges from 2011 to 2017.
Alexander Vinnik, 44, was charged in January 2017 and detained in Greece in July 2017. He was later extradited to the US in August 2022. Vinnik and his co-conspirators were accused of owning and managing BTC-e, which allowed their criminal clients to trade Bitcoin with high levels of anonymity.
BTC-e is said to have facilitated transactions for cybercriminals around the world, receiving illicit proceeds from numerous computer intrusions and hacking incidents, ransomware scams, identity theft schemes, corrupt public officials, and narcotics distribution networks. .
The cryptocurrency exchange received more than $4 billion in bitcoins throughout its operation, according to the US Department of Justice (DoJ). It has also processed more than $9 billion in transactions and served more than a million users worldwide, several of them in the US.
Additionally, the entity has not been registered as a financial services company with the U.S. Department of the Treasury, despite conducting substantial business in the U.S., and has not enforced any anti-money laundering (AML) or Know Your Customer (KYC) guidelines as required by federal law. law, making it an attractive choice for criminals looking to hide their illicit funds.
Vinnik was previously charged with one count of operating an unlicensed financial services business, one count of conspiracy to commit money laundering, 17 counts of money laundering and two counts of engaging in illegal monetary transactions.
“BTC-e was one of the primary ways cybercriminals around the world transferred, laundered and stored the criminal proceeds of their illegal activities,” the DoJ said. “Vinnik operated BTC-e with the intent to promote these illegal activities and was responsible for a loss of at least $121 million.”
In early February, the U.S. government loaded another BTC-e operator, a Belarusian and Cypriot citizen named Aliaksandr Klimenka, for money laundering and operating an unlicensed financial services business.
Shortly after Vinnik’s 2017 arrest, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) announced [PDF] levied a $110 million civil fine against BTC-e for violating AML laws and an additional $12 million fine against Vinnik.
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