Alexander Vinnik, one of the co-founders of crypto exchange BTC-e, has admitted to participating in a conspiracy to launder money. This admission follows a wide-ranging investigation that uncovered extensive illegal activities on the exchange between 2011 and 2017.
In a press release issued by the United States Department of Justice (DOJ) on May 3, it was revealed that BTC-e, under Vinnik’s leadership, processed over $9 billion in transactions and had a user base of more than one million people worldwide, including many users in the United States.
The DOJ emphasized that the platform was used to launder funds obtained through various criminal activities, such as computer hacking, ransomware attacks, and drug trafficking.
According to the DOJ, the investigation discovered that BTC-e operated without essential legal compliance measures, including registration with the Financial Crimes Enforcement Network (FinCEN) and the implementation of Anti-Money Laundering (AML) or Know Your Customer (KYC) protocols.
These deficiencies made BTC-e attractive to individuals looking to hide their financial transactions from law enforcement. Additionally, Vinnik was found to have established numerous shell companies and financial accounts around the world, enabling the illicit transfer of funds through BTC-e, resulting in criminal losses of at least $121 million.
Vinnik has been involved 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 illegal 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 cleared of allegations related to ransomware but was convicted of money laundering and sentenced to five years in prison.
Vinnik’s lawyers launched an unsuccessful appeal, arguing that Vinnik was merely an employee of the exchange and had no involvement in any illicit activities at BTC-e. After serving two years in a French prison, Vinnik was extradited to the United States on August 5, 2022.
As a Russian citizen, Vinnik had previously attempted to negotiate a prisoner swap as part of a trade deal between Russia and the United States.
U.S. authorities have also brought criminal charges against other crypto 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.
Overall, law enforcement agencies in the United States are intensifying their efforts to combat crypto-related crimes.