Key Takeaways
- Alexander Vinnik pleads guilty in a major money laundering case involving BTC-e, which processed over $9 billion transactions from 2011 to 2017;
- BTC-e was notorious for laundering money from crimes like hacking and drug trafficking due to its failure to adhere to regulations;
- Vinnik had sought a US-Russia prisoner swap.
Alexander Vinnik, one of the operators behind the cryptocurrency exchange BTC-e, has entered a guilty plea in a money laundering conspiracy case.
According to the US Department of Justice (DOJ), the crypto exchange became ahub for laundering money from various criminal activities, including computer hacking, ransomware attacks, identity theft, and drug trafficking.
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BTC-e’s appeal to criminals was heightened by its failure to adhere to financial regulations, lack of registration with the Financial Crimes Enforcement Network (FinCEN) and neglect of Anti-Money Laundering (AML) and Know Your Customer (KYC) protocols.
The DOJ stated that Vinnik ran the crypto exchange to facilitate illegal activities, which resulted in losses of at least $121 million.
During its operational years from 2011 to 2017, BTC-e processed over $9 billion in transactions and served more than a million users globally, including many from the United States.
Deputy Attorney General Lisa Monaco noted:
This guilty plea reflects the Department’s ongoing commitment to use all tools to fight money laundering, police crypto markets, and recover restitution for victims.
In 2017, Vinnik was arrested in Greece on charges of money laundering and subsequently extradited to France in 2020. While in France, he received a five-year prison sentence. However, Vinnik served two years of his sentence and was extradited to the US in August 2022.
As a Russian national, Vinnik had previously attempted to be included in a prisoner exchange between the United States and Russia.
Similar legal actions have been taken by US authorities against other cryptocurrency exchanges and their executives. This includes the 25-year prison sentence handed to Sam Bankman-Fried for his role in FTX’s collapse. He has appealed his conviction and sentence.
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