Alexander Vinnik, co-founder of the crypto exchange BTC-e, has admitted guilt to a money laundering conspiracy.
This acknowledgment comes in the wake of a comprehensive investigation uncovering a multitude of illegal activities carried out on the exchange between 2011 and 2017.
According to a press release from the United States Department of Justice (DOJ) on May 3, BTC-e, under Vinnik’s leadership, facilitated over $9 billion in transactions and amassed a user base exceeding one million globally, including many users from the United States.
The DOJ emphasized that BTC-e served as a channel to launder proceeds from various criminal endeavors, such as computer hacking, ransomware attacks, and drug trafficking.
Investigations revealed that BTC-e operated without crucial legal compliance measures, such as registration with the Financial Crimes Enforcement Network (FinCEN) and Anti-Money Laundering (AML) or Know Your Customer (KYC) protocols.
These deficiencies made BTC-e attractive to individuals seeking to obscure money transactions from law enforcement.
Additionally, Vinnik was found to have established multiple shell companies and financial accounts worldwide, facilitating the illicit transfer of funds through BTC-e, resulting in criminal losses amounting to at least $121 million.
Vinnik has been entangled in legal proceedings for the past five years due to his purported role as the mastermind behind BTC-e.
The cryptocurrency exchange allegedly profited from various illicit activities amounting to approximately $4 billion in laundered Bitcoin transactions.
Arrested on money laundering charges in Greece in 2017, Vinnik was later extradited to France in 2020.
In France, he was absolved of ransomware accusations but was convicted of money laundering and sentenced to five years in prison.
Despite an unsuccessful appeal by Vinnik’s legal team asserting his mere role as an exchange employee without involvement in illicit activities at BTC-e, he was extradited to the U.S. on August 5, 2022, after serving two years in a French prison.
A Russian citizen, Vinnik had previously attempted to negotiate a prisoner swap deal as part of a diplomatic arrangement between Russia and the United States.
Similar criminal charges have been levied against crypto exchanges and executives by U.S. authorities, evidenced by the recent sentencing of former FTX CEO Sam Bankman-Fried to 25 years for seven felony charges on March 28.
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