The site was used to launder money obtained from a variety of illegal operations, such as narcotics trafficking, ransomware attacks, and computer hacking.
Co-founder of the cryptocurrency exchange BTC-e Alexander Vinnik has entered a guilty plea to conspiracy to launder money. This comes after a more thorough investigation that showed numerous illicit actions between 2011 and 2017 on the exchange.
The US Department of Justice (DOJ) said in a news release dated May 3 that under Vinnik’s direction, BTC-e handled over $9 billion in transactions and had over a million customers worldwide, including a large number of users residing in the US.
The Department of Justice made clear that money obtained from a range of illegal acts, such as ransomware attacks, computer hacking, and drug trafficking, was laundered through the site.
The DOJ claims that an investigation found that BTC-e did not follow basic legal compliance procedures, such as registering with the Financial Crimes Enforcement Network (FinCEN), adhering to Know Your Customer (KYC) or Anti-Money Laundering (AML) regulations.
Due to these flaws, BTC-e became well-liked by those looking to hide financial activities from authorities. Furthermore, it was found that Vinnik had set up multiple shell corporations and bank accounts throughout the world, facilitating the unauthorized transfer of money via BTC-e and causing at least $121 million in criminal losses.
For the past five years, Vinnik has been involved in legal disputes because of his purported involvement as the brains of BTC-e. The cryptocurrency exchange is alleged to have made money off of a number of illegal operations that laundered about $4 billion worth of Bitcoin through the network.
Vinnik was extradited to France in 2020 after being detained in Greece in 2017 on suspicion of money laundering. Although Vinnik was found not guilty of any ransomware crimes in France, he was found guilty of money laundering and given a five-year prison sentence.
Vinnik’s attorneys attempted a failed appeal, arguing that Vinnik was merely an exchange worker and wasn’t involved in any illegal activity while working at BTC-e. On August 5, 2022, following two years of incarceration in France, he was extradited to the United States.
Vinnik is a citizen of Russia and has previously attempted to negotiate a prisoner swap so that he may be included in a prisoner trading agreement between Russia and the United States.
Similar criminal accusations have been made by US authorities against CEOs and cryptocurrency exchanges. Sam Bankman-Fried, the former CEO of FTX, was given a 25-year term on March 28 for seven felonies.
