A Russian national pleaded guilty today to conspiracy to commit money laundering related to his role in operating cryptocurrency exchange BTC-e from 2011 to 2017, the U.S. Department of Justice reported.
According to court documents, Alexander Vinnick, 44, was one of the operators of BTC-e, which was one of the world’s largest virtual currency exchanges. From its inception in or around 2011 until it was shut down by law enforcement in or around July 2017 contemporaneous with Vinnik’s arrest, BTC-e processed over $9 billion-worth of transaction and served over one million users worldwide, including numerous customers in the United States.
“Today’s result shows how the Justice Department, working with international partner, reaches across the globe to combat cryptocrime,” said Deputy Attorney General Lisa Monaco. “This guilty plea reflects the Department’s ongoing commitment to use all tools to fight money laundering, police crypto markets, and recover restitution for victims.”
Despite doing substantial business in the United States, BTC-e was not registered as a money services business with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), as federal law requires.
BTC-e had no anti-money laundering (AML) and/or know-your-customer” (KYC) processes and policies in place, as federal law also requires. BTC-e collected virtually no customer data at all, which made the exchange attractive to those who desired to conceal criminal proceeds from law enforcement.
Coindesk reported Alexander Vinnik, one of the operators behind the BTC-e crypto exchange, pleaded guilty to a charge of conspiring to commit money laundering on Friday, the U.S. Department of Justice announced.
Vinnik was an operator of BTC-e between 2011 and 2017, the DOJ said, and the exchange processed more than 1 million users transacting over $9 billion in crypto during that time.
BTC-e was linked to the hack of now-defunct crypto exchange Mt. Gox after it was used to launder some 300,000 (BTC) from Mt. Gox. BTC-e was shut down in July 2017, at the same time Vinnik was first arrested.
Bitcoin Insider reported Alexander Vinnik, a Russian national who operated the crypto exchange BTC-e, pled guilty to charges of money laundering conspiracy in the US on May 3, according to a Bloomberg report.
BTC-e was one of the world’s largest crypto exchanges between 2011 and 2017. According to the prosecutors, it processed transactions worth $9 billion and had a customer base of over 1 million worldwide.
Prosecutor claim the BTC-e did not have a vetting system and allowed criminals to convert illicit cash into cryptocurrencies like Bitcoin anonymously. The prosecutors stated that the exchange was found to have handled Bitcoin traced to a Russian military intelligence hacking unit that was responsible for releasing Democrats’ emails during the 2016 U.S. elections in an attempt to sway votes.
In my opinion, those who engage in cryptocurrency scams such as the one Vinnick was involved in should have known that the Department of Justice was looking into what was happening at BTC-e.