Russian National Pleads Guilty in Major Money Laundering Conspiracy Linked to BTC-e Exchange
Alexander Vinnik, a 44-year-old Russian national, has admitted to his involvement in a significant money laundering scheme associated with the notorious BTC-e cryptocurrency exchange. The Department of Justice (DoJ) revealed that Vinnik was one of the key operators of the exchange from its inception in 2011 until it was shut down by law enforcement in 2017.
During its operational years, BTC-e facilitated transactions exceeding $9 billion and catered to over a million users globally, a substantial number of whom were cybercriminals seeking to launder illicit proceeds. Vinnik’s actions allegedly led to criminal losses surpassing $120 million by aiding criminals in cleaning funds obtained from activities such as computer breaches, ransomware attacks, identity theft, corruption schemes, and drug trafficking rings.
The exchange conducted business in the United States without registering as a money services business with the Financial Crimes Enforcement Network (FinCEN), the leading anti-money laundering (AML) organization in the country. BTC-e lacked essential AML and know-your-customer (KYC) protocols mandated by federal regulations and collected minimal customer information.
According to the DoJ, BTC-e utilized shell companies and unregistered affiliates to facilitate fund transfers globally, circumventing AML and FinCEN requirements. Deputy Attorney General Lisa Monaco emphasized the global collaboration in combating cryptocurrency-related crimes, highlighting the department’s dedication to combating money laundering, regulating crypto markets, and recovering funds for victims.
Vinnik’s legal troubles began in 2017 when he was arrested in Greece, sparking a legal battle among Russia, the United States, and France over his extradition. Ultimately, France secured his extradition and sentenced Vinnik to a lengthy prison term in 2020. In a related development, another Russian national, Alexey Bilyuchenko, was charged last year for his involvement in embezzling funds from the defunct Mt Gox exchange and collaborating with Vinnik to operate BTC-e from 2011 to 2017, allegedly using stolen funds to launch the exchange.