Alexander Vinnik, co-founder of the cryptocurrency exchange BTC-e, has admitted involvement in a money laundering conspiracy. This plea is part of a larger DOJ investigation that exposed a range of illegal activities conducted through the exchange from 2011 to 2017. BTC-e reportedly handled over $9 billion in transactions and had more than a million users worldwide, including significant numbers in the United States.
The DOJ’s findings indicate that BTC-e facilitated money laundering from various crimes like computer hacking, ransomware attacks, and drug trafficking. The exchange operated without the necessary legal safeguards such as registration with FinCEN and adherence to Anti-Money Laundering (AML) and Know Your Customer (KYC) protocols.
This lack of compliance made BTC-e a go-to for those looking to hide their financial activities from authorities. Vinnik allegedly set up multiple shell companies and financial accounts around the world to assist in moving illicit funds through BTC-e. These activities resulted in criminal losses of at least $121 million.
Legal Troubles and International Implications
Vinnik’s legal troubles began when he was arrested in Greece in 2017 on money laundering charges. He was later extradited to France in 2020, where he faced both ransomware-related charges, of which he was cleared, and money laundering charges, resulting in a five-year prison sentence. Despite appeals arguing that Vinnik was merely an exchange employee, he served two years before his extradition to the U.S. in August 2022.
In his ongoing legal battles, Vinnik, a Russian national, unsuccessfully sought a prisoner swap deal between Russia and the United States. His case mirrors the broader trend of U.S. authorities targeting crypto exchanges and their executives for illegal activities, as seen in the recent 25-year sentencing of former FTX CEO Sam Bankman-Fried on multiple felony charges.