BTC-e founder admits guilt in $9 billion laundering conspiracy

May. 4, 2024
BTC-e founder admits guilt in $9 billion laundering conspiracy

Alexander Vinnik, a Russian national and co-founder of the cryptocurrency exchange BTC-e, has pleaded guilty to a significant money laundering conspiracy related to the exchange’s operations. This admission comes after a comprehensive investigation uncovered various illicit activities carried out on the platform between 2011 and 2017.

The United States Justice Department (DOJ) reported that during Vinnik’s leadership, BTC-e processed more than $9 billion in transactions. It also had a one million user base globally, with many users from the United States. A federal district court judge will determine his sentence by the U.S. Sentencing Guidelines and other statutory factors.

In addition, The Department of Justice has also said that the platform was used as an instrument for money laundering derived from different kinds of crimes, such as hacking computers or spreading ransomware viruses; it was also employed in drug trafficking.

According to the DOJ, an investigation revealed that BTC-e operated without essential legal compliance measures. These measures included registration with the Financial Crimes Enforcement Network (FinCEN) and the implementation of Anti-Money Laundering (AML) or Know Your Customer (KYC) protocols.

In addition, Vinnik’s involvement in creating many different shell businesses worldwide and various bank accounts enabled him to move illegal money more easily through BTC-e. As a result of what he did, there have been criminal losses estimated at over $121 million.

Legal Battles and Extraditions

Legal battles over 5 years accused Vinnik as BTC-e’s illicit operator, embroiled in allegations of being the mastermind. The exchange is believed to have profited from facilitating illegal transactions amounting to approximately $4 billion worth of Bitcoin.

Vinnik’s legal trouVinnik’san in 2017 when authorities arrested him in Greece on money laundering charges under a U.S. warrant. Following his extradition to France in 2020, he was acquitted of ransomware allegations but convicted of money laundering. He received a five-year prison sentence.

Despite launching an unsuccessful appeal, Vinnik’s lawyers said he was merely an exchange employee and not involved in illicit activities. After serving two years in a French prison, authorities extradited him to the United States on August 5, 2022.

The DOJ acknowledged the cooperation of the Greek government in extraditing Vinnik to the United States despite his previous attempts to negotiate a prisoner swap between Russia and the U.S.

U.S. authorities have brought similar criminal charges against other cryptocurrency exchanges and their executives in a related development. On March 28, authorities sentenced former FTX CEO Sam Bankman-Fried to 25 years for seven felony charges.

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Rida Fatima

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An ardent wordsmith with a rich five-year background in delving into the realms of finance and cryptocurrencies. Alongside curating captivating blogs, Unique's talents extend to crafting imaginative and engaging content.