Founder of crypto exchange BTC-E pleads guilty in $9 billion money laundering case

Alexander Vinnik, co-founder of the cryptocurrency exchange BTC-e, has pleaded guilty to money laundering, according to a recent statement from the US Department of Justice (DOJ). This admission follows an extensive investigation that revealed that from 2011 to 2017, BTC-e processed more than $9 billion in transactions for a group of users worldwide that exceeded one million, with many users from the United States.

BTC-e and money laundering

The DOJ emphasized that BTC-e acted as a platform for laundering proceeds from various criminal activities, including computer hacking, ransomware attacks and drug trafficking. The platform lacked key regulatory compliance, such as registration with the Financial Crimes Enforcement Network (FinCEN) and implementation of Anti-Money Laundering (AML) and Know Your Customer (KYC) protocols. In short: the platform did not have the right papers.

The case had been going on for years, and Vinnik now has to deal with the blisters.

BTC-e Operator Pleads Guilty to Money Laundering Conspiracy

Exchange Moved Over $9B Worth of Transactions; Defendant Caused Criminal Losses in Excess of $100M

🔗: https://t.co/yMrJMgn9qC pic.twitter.com/nRyad1AH7D

— Criminal Division (@DOJCrimDiv) May 3, 2024

These legal shortcomings made BTC-e attractive to individuals who wanted to conceal their financial activities from the authorities. Vinnik himself had set up several sham companies and financial accounts around the world, allowing illegal funds to be transferred via BTC-e. This resulted in criminal losses of at least $121 million.

Arrest

Vinnik was arrested in Greece for money laundering in 2017 and extradited to France in 2020, where he was sentenced to five years in prison for money laundering after being acquitted of ransomware charges. After spending two years in a French prison, he was extradited to the United States in August 2022.