BTC-e Trader Alexander Vinnik Pleads Guilty to Money Laundering Conspiracy Charge
The citizen of Russian origin had been arrested in 2017. He faced a long extradition process that took him to Greece, France, and finally to the United States. The guilty plea follows a broader investigation that revealed extensive illegal activities on the exchange for several years.
According to information provided by the US Department of Justice, one of the operators behind the BTC-e crypto exchange, Alexander Vinnik, pleaded guilty on Friday to one count of conspiracy to commit money laundering between 2011 and 2017.
During such period, the exchange processed more than 1 million users who transacted more than $9 billion in Crypto. BTC-e had a user base exceeding one million globally, with many users coming from the United States. A federal court judge will determine his sentence in accordance with the United States Sentencing Guidelines and other statutory factors.
The United States Department of Justice highlighted that the platform was used to launder funds acquired from various criminal activities, including computer hacks, ransomware attacks and drug trafficking.
Vinnik’s Long Extradition Process
In 2017, Vinnik was arrested on money laundering charges in Greece, via a US warrant, and subsequently extradited to France in 2020. In France, Vinnik was acquitted of ransomware accusations but convicted on money laundering charges. money and was sentenced to five years in prison.
Vinnik’s extradition to the US came after serving two years in a French prison. In this regard, the DOJ recognized the cooperation of the Greek government in said process, which was carried out on August 5, 2022.
Vinnik has been involved in legal battles for the past five years over his alleged role as the mastermind of BTC-e. He initially denied that he was a BTC-e trader, saying he was just an employee of the exchange, and that, therefore, he had no involvement in illicit activities in BTC-e.
Vinnik had previously attempted to secure a prisoner exchange agreement to be considered as part of a prisoner exchange agreement between Russia and the United States.
BTC-e’s Illegal Operations in the US
BTC-e was linked to the hack of the now-defunct Mt. Gox Crypto exchange after it was used to launder around 300,000 (BTC) of Mt. Gox. BTC-e was shut down in July 2017, the same year Vinnik was first arrested.
As reported by the DOJ, an investigation revealed that BTC-e operated without essential legal compliance measures, including registration with the Financial Crimes Network (FinCEN) and the implementation of Anti-Money Laundering (AML) or Know Your Customer protocols. (KYC). With these flaws, BTC-e became popular among users who wanted to hide money transactions from authorities.
Vinnik’s modus operandi consisted of establishing numerous shell companies and financial accounts worldwide, in order to facilitate the illicit transfer of funds through BTC-e. This procedure resulted in criminal losses totaling at least USD 121 million.
As reported in a press release by the US DOJ, Deputy Attorney General Lisa Monaco stated that “Today’s result shows how the Justice Department, working with international partners, reaches across the globe to combat cryptocrime.” She further added that “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.”
It should be noted that US authorities have brought similar criminal charges against cryptocurrency exchanges and their executives. On March 28, former FTX CEO Sam Bankman-Fried had been sentenced to 25 years on seven criminal charges.
By Audy Castaneda