Alexander Vinnik, co-founder of the crypto exchange BTC-e, recently pleaded guilty to money laundering conspiracy. This plea relates to wide-ranging illegal activities that were conducted on the exchange between 2011 and 2017. The United States Department of Justice (DOJ) reported in a May 3 press release that under the guidance of Vinnik, BTC-e facilitated over $9 billion in transactions. The crypto exchange platform served more than a million users globally and was commonly used in the United States.
The DOJ made the case that BTC-e was a hotbed for laundering funds obtained through illicit activities, like computer hacking ventures, ransomware attacks, and drug trafficking. The investigation conducted by the DOJ unearthed that BTC-e operation lacked fundamental legal compliances like registration with the Financial Crimes Enforcement Network (FinCEN) and adhered to neither Anti-Money Laundering (AML) nor Know Your Customer (KYC) guidelines.
The platform’s lack of appropriate safety measures made it appealing for those intending to conceal monetary transactions from law enforcement. The investigation discovered that Vinnik formed numerous shell companies and worldwide financial accounts, thereby facilitating the illegal transfer of funds via BTC-e. The criminal losses arising from these actions mounted to at least $121 million.
Vinnik’s involvement with BTC-e has led to multiple legal disputes over the past five years. He is considered the principal operative of BTC-e, which is suspected to have amassed considerable profits through various illegal activities, primarily by laundering nearly $4 billion worth of Bitcoin.
In 2017, Greek authorities arrested Vinnik on charges of money laundering. He was later extradited to France in 2020. In France, although Vinnik was absolved of ransomware allegations, he was found guilty of money laundering charges and sentenced to five years of imprisonment. Despite appealing the decision, asserting that Vinnik was only an exchange employee without involvement in any illegal activities, the appeal was unsuccessful. After a two-year incarceration period in France, Vinnik was extradited to the United States on August 5, 2022.
U.S. authorities have previously brought similar charges against executives and crypto exchanges. Sam Bankman-Fried, the former CEO of FTX, was sentenced to 25 years for seven felony charges on March 28.