Alexander Vinnik, a Russian national, has pleaded guilty to charges of conspiracy to commit money laundering through his operation of the crypto exchange BTC-e, one of the largest of its kind globally, before its shutdown by law enforcement in 2017. From 2011 to 2017, BTC-e facilitated over $9 billion in transactions and attracted over one million users. BTC-e was a preferred platform for cybercriminals to launder money derived from various illegal activities.
In July 2017, Vinnik was arrested in Greece and was extradited to the United States on 4 August 2022. Alexander Vinnik, 44, operated BTC-e with the express intent to promote these unlawful activities, directly contributing to criminal losses estimated at no less than $121 million, the U.S. prosecutors explained. After his guilty plea, a federal district court judge will determine Vinnik’s sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Read our reports about BTC-e here.
BTC-e was notably non-compliant with critical U.S. regulations. It failed to register as a money services business with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), and it lacked essential anti-money laundering (AML) and “know-your-customer” (KYC) processes. This absence of customer data collection made BTC-e appealing to individuals seeking to hide illicit funds from authorities.
The operation involved the use of shell companies and affiliate entities, which were also unregistered and lacked AML and KYC policies. Vinnik set up numerous such entities worldwide to facilitate BTC-e’s operations.
In 2017, FinCEN imposed a $110 million civil money penalty on BTC-e for willful violations of U.S. AML laws and a $12 million penalty on Vinnik for his role in those violations.
