A Russian national, Alexander Vinnik, has pleaded guilty to conspiracy to commit money laundering in connection with his involvement in operating the cryptocurrency exchange BTC-e from 2011 to 2017. Vinnik, who was one of the operators of BTC-e, oversaw a platform that processed over $9 billion in transactions and catered to more than one million users globally, including a significant number of customers in the United States.
Deputy Attorney General Lisa Monaco highlighted the significance of this case, stating, “Today’s result shows how the Justice Department, working with international partners, reaches across the globe to combat cryptocrime.”
BTC-e played a crucial role in enabling cyber criminals worldwide to transfer, launder, and conceal the proceeds of illegal activities. The exchange facilitated transactions stemming from various criminal acts such as computer intrusions, ransomware attacks, identity theft schemes, corruption, and drug distribution. Vinnik's involvement in BTC-e led to a loss of at least $121 million.
Despite conducting substantial business in the United States, BTC-e failed to comply with federal regulations by not registering as a money services business with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). Moreover, the exchange lacked essential anti-money laundering (AML) and "know-your-customer" (KYC) measures, making it attractive to individuals seeking to obscure illicit funds from law enforcement.
In response to these violations, FinCEN imposed significant penalties on BTC-e, including a $110 million civil money penalty for breaching U.S. AML laws and a $12 million civil penalty against Vinnik for his complicity in the offenses.
The investigation into this case involved the FBI, IRS Criminal Investigation’s Cyber Crime Unit, U.S. Secret Service Criminal Investigative Division, and Homeland Security Investigations (HSI), with support from former prosecutors and investigators from various agencies. Trial Attorney C. Alden Pelker and Assistant U.S. Attorneys Claudia Quiroz and Katie Lloyd-Lovett are prosecuting the case, with the Justice Department's National Cryptocurrency Enforcement Team (NCET) playing a pivotal role.
The Justice Department expressed gratitude to the Government of Greece for its cooperation in facilitating Vinnik's extradition to the United States for prosecution. A federal district court judge will determine Vinnik's sentence, taking into account the U.S. Sentencing Guidelines and other statutory factors.