BTC-e founder pleads guilty to $9 billion laundering conspiracy
Alexander Vinnik, the Russian co-founder of illegal cryptocurrency exchange BTC-e, has pleaded guilty to money laundering conspiracy in connection with the cryptocurrency exchange. The admission follows an extensive investigation that uncovered widespread illegal activity at the exchange between 2011 and 2017.
The U.S. Department of Justice (DOJ) reported that during Vinnik’s leadership, BTC-e processed more than $9 billion in transactions and had a global user base of over 1 million, with many users in the United States. A federal district court judge will determine his sentence based on the U.S. Sentencing Guidelines and other statutory factors.
The U.S. Department of Justice emphasized that the platform was used to launder funds obtained through various criminal activities, including computer hacking, ransomware attacks, and drug trafficking.
According to the Department of Justice (DOJ), the investigation found that BTC-e operated without required legal compliance measures, including registering with the Financial Crimes Enforcement Network (FinCEN) and implementing anti-money laundering (AML) or know-your-customer (KYC) protocols.
These flaws have made BTC-e popular among individuals seeking to conceal their financial transactions from law enforcement. Additionally, Vinnik was found to have established numerous shell companies and financial accounts around the world to enable illicit fund transfers via BTC-e. This activity resulted in criminal losses totaling $121 million.
Vinnik has been embroiled in a legal battle for the past five years for his role as the mastermind behind BTC-e. The cryptocurrency exchange reportedly used the platform to profit from a variety of illegal activities, laundering approximately $4 billion worth of Bitcoin.
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Vinique was arrested on money laundering charges in Greece on a U.S. warrant in 2017 and extradited to France in 2020. In France, Vinique was acquitted of ransomware charges but was found guilty of money laundering and sentenced to five years in prison.
Vinnik’s lawyers launched an unsuccessful appeal, arguing that Vinnik was merely an exchange employee and was not involved in BTC-e’s illegal activities. He was extradited to the United States on August 5, 2022, after serving two years in a French prison.
The Justice Department acknowledged the Greek government’s cooperation in extraditing Vinnik to the United States. Vinnik had previously tried to secure a prisoner exchange deal to count him as part of a prisoner trade deal between Russia and the United States.
U.S. authorities have filed similar criminal charges against cryptocurrency exchanges and their executives. On March 28, former FTX CEO Sam Bankman-Fried was sentenced to 25 years in prison for seven felonies.
magazine: U.S. enforcement agencies are stepping up their game against cryptocurrency-related crimes.
