Russian Operator of BTC-e Crypto Exchange Pleads Guilty to Money Laundering
A Russian operator of the now-defunct BTC-e cryptocurrency exchange, Alexander Vinnik, has pleaded guilty to money laundering charges from 2011 to 2017. Vinnik, 44, was charged in January 2017 and taken into custody in Greece in July 2017. He was subsequently extradited to the U.S. in August 2022.
BTC-e, which allowed its criminal customers to trade in Bitcoin with high levels of anonymity, facilitated transactions for cybercriminals worldwide. The crypto exchange received more than $4 billion worth of bitcoin over the course of its operation, according to the U.S. Department of Justice (DoJ). It also processed over $9 billion-worth of transactions and served over one million users worldwide, several of them in the U.S.
“BTC-e was one of the primary ways by which cyber criminals around the world transferred, laundered, and stored the criminal proceeds of their illegal activities,” the DoJ said.
Cryptocurrency exchange
Vinnik and his co-conspirators have been accused of owning and managing BTC-e, which did not register as a money services business with the U.S. Department of Treasury despite doing substantial business in the U.S. The entity also did not enforce any anti-money laundering (AML) or Know Your Customer (KYC) guidelines as required by federal law, making it an attractive choice for criminals looking to obscure their ill-gotten funds.
Money laundering
In addition to the money laundering charges, Vinnik was also charged with one count of operation of an unlicensed money service business, one count of conspiracy to commit money laundering, 17 counts of money laundering, and two counts of engaging in unlawful monetary transactions.
Earlier this February, the U.S. government charged another BTC-e operator, a Belarusian and Cypriot national named Aliaksandr Klimenka for money laundering and operating an unlicensed money services business.
Cryptocurrency regulation
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced it assessed a $110 million civil money penalty against BTC-e for violating AML laws and an additional $12 million penalty against Vinnik.
