2024

Bitcoin

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Alexander Vinnik, co-founder of the now-defunct crypto exchange BTC-e, admitted to conspiring to launder money, marking a significant development in a long-standing legal saga. 
Vinnik’s guilty plea comes in the wake of a broader investigation that unearthed extensive illegal activities on the exchange from 2011 to 2017. 
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 BTC-e Operator Pleads Guilty to Money Laundering Conspiracy Exchange Moved Over $9B Worth of Transactions; Defendant Caused Criminal Losses in Excess of $100M 🔗: <a href="https://t.co/yMrJMgn9qC" target="_blank" rel="">https://t.co/yMrJMgn9qC</a> <a href="https://t.co/nRyad1AH7D" target="_blank" rel="">pic.twitter.com/nRyad1AH7D</a>— Criminal Division (@DOJCrimDiv) <a href="https://twitter.com/DOJCrimDiv/status/1786510538853249332?ref_src=twsrc%5Etfw" target="_blank" rel="">May 3, 2024</a>
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<h3 class="wp-block-heading" id="btc-e-conduit-for-laundering-funds">BTC-e: Conduit for laundering funds</h3> 
In a May 3 <a href="https://www.justice.gov/opa/pr/btc-e-operator-pleads-guilty-money-laundering-conspiracy" target="_blank" rel="">press release</a>, the U.S. Department of Justice (DoJ) revealed that at the time Vinnik was at the helm of BTC-e, the exchange processed no less than $9 billion in transactions and amassed a global user base exceeding one million, with many of them located in the U.S. 
According to the DoJ, BTC-e served as a conduit for laundering funds acquired from a variety of criminal activities. 
Moreover, the DoJ’s investigation revealed that BTC-e operated without having compliance measures such as registration with the Financial Crimes Enforcement Network (FinCEN) in place.&nbsp; 
Furthermore, the exchange did not put its customers through anti-money laundering (AML) or know-your-customer (KYC) protocols in the period it operated. 
Additionally, investigators found Vinnik to have established numerous shell companies and financial accounts worldwide, facilitating the illicit transfer of funds through BTC-e, resulting in criminal losses totaling at least $121 million. 
 You might also like: <a href="https://crypto.news/major-russian-exchange-freezes-4m-of-user-assets-citing-money-laundering/" rel=""> Major Russian exchange freezes $4m of user assets, citing money laundering </a> 
The case gained traction following a 2017 <a href="https://crypto.news/btce-role-in-mtgox-hack-laundered-4-bln-in-bitcoin/" target="_blank" rel="">report</a> by WizSecurity, which revealed BTC-e’s involvement in the Mt. Gox hack. 
The report detailed how hackers, in collaboration with BTC-e and Vinnik, laundered stolen Bitcoins through the exchange, implicating Vinnik in the illicit activity. 
In February, the DoJ <a href="https://crypto.news/us-doj-brings-charges-in-btc-e-exchange-case/" target="_blank" rel="">indicted</a> Belarusian Aliaksandr Klimenka as the main defendant in the BTC-e case, alongside Vinnik. 
Klimenka faces charges of conspiracy to launder money and running an unlicensed financial services business, with an estimated $4 billion in laundered funds. 
At the time of Klimenka’s indictment, the DoJ stated that BTC-e servers in the U.S. were crucial tools for criminal operations, purportedly supported by Klimenka and his company Soft-FX. 
Following BTC-e’s closure by American law enforcement in 2017, Vinnik was arrested near Thessaloniki, Greece. After extradition to the U.S. in 2022, the Russian-born crypto entrepreneur faced accusations of money laundering and other offenses. 
Despite attempts to revive and rebrand BTC-e as WEX, the venture eventually shuttered, leaving many users unable to withdraw funds. 
In 2023, Alexey Bilyuchenko, a Vinnik associate and the former technology administrator of BTC-e, was fined and <a href="https://crypto.news/moscow-court-sentences-ex-btc-e-administrator-to-3-5-years-in-prison/" target="_blank" rel="">sentenced</a> to three years and six months in prison for misappropriating the exchange’s funds. 
 Read more: <a href="https://crypto.news/crypto-lawyer-sam-bankman-fried-to-serve-20-year-prison-sentence-without-parole/" rel=""> Crypto lawyer: Sam Bankman-Fried to serve 20-year prison sentence without parole </a>

BTC-e founder pleads guilty to laundering stolen Bitcoin

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