Alexander Vinnik, one of the co-founders of the cryptocurrency exchange BTC-e, has admitted his involvement in a conspiracy to launder money. This admission comes after a thorough investigation uncovered widespread illegal activities that took place on the exchange between 2011 and 2017.
In a press release issued on May 3, the United States Department of Justice (DOJ) revealed that under Vinnik’s leadership, BTC-e processed over $9 billion in transactions and had a user base of over one million people worldwide, including a significant number of users in the United States.
The DOJ emphasized that the platform was utilized to launder funds obtained through various criminal endeavors, such as computer hacking, ransomware attacks, and drug trafficking.
According to the DOJ, their investigation uncovered the fact that BTC-e operated without crucial legal compliance measures, such as registration with the Financial Crimes Enforcement Network (FinCEN) and Anti-Money Laundering (AML) or Know Your Customer (KYC) protocols.
These deficiencies made BTC-e an attractive option for individuals looking to hide their financial transactions from law enforcement. Furthermore, Vinnik was found to have established multiple shell companies and financial accounts worldwide, which facilitated the illegal transfer of funds through BTC-e, resulting in criminal losses of at least $121 million.
Vinnik has been entangled in legal disputes for the past five years, accused of being the mastermind behind BTC-e. It is alleged that the cryptocurrency exchange profited from various illicit activities, using the platform to launder approximately $4 billion worth of Bitcoin (BTC).
In 2017, Vinnik was arrested in Greece on money laundering charges and was later extradited to France in 2020. While in France, Vinnik was acquitted of the ransomware allegations but was convicted of money laundering charges and handed a five-year prison sentence.
Despite an unsuccessful appeal launched by his legal team, claiming that Vinnik was merely an employee of the exchange and had no involvement in illicit activities at BTC-e, he was extradited to the United States on August 5, 2022.
Vinnik, a Russian citizen, had previously attempted to secure a prisoner swap deal, hoping to be included in a trade agreement between Russia and the United States.
U.S. authorities have pursued similar criminal charges against other cryptocurrency exchanges and executives. For instance, on March 28, former FTX CEO Sam Bankman-Fried was sentenced to 25 years in prison for seven felony charges.
It is evident that U.S. enforcement agencies are intensifying their efforts to combat crypto-related crimes, as highlighted in various publications.