Russian Co-Founder of BTC-e, Alexander Vinnik, Admits to Multi-billion Dollar Money Laundering Scheme
Summary:
Alexander Vinnik, the Russian co-founder of the alleged illegal crypto exchange BTC-e, has admitted to a money laundering scheme. During his time in charge, BTC-e processed over $9 billion in transactions and was used to launder funds from criminal activities. Vinnik was also found to have created several shell companies, facilitating illegal fund transfers. After a failed appeal and serving two years in a French prison for money laundering charges, Vinnik was extradited to the U.S. He now awaits sentencing from a federal district court judge.
Alexander Vinnik, who hails from Russia and is one of the original founders of the accused illegal crypto exchange, BTC-e, has conceded to participating in a money-laundering partnership related to this exchange. This confession came in the wake of a comprehensive investigation that unearthed a myriad of unauthorized operations on the platform between 2011 and 2017. As relayed by the U.S. Justice Department (DOJ), BTC-e, under Vinnik's oversight, facilitated transactions exceeding $9 billion counting over a million users worldwide; a significant portion were U.S. residents. His punishment is yet to be decreed by a federal district court judge, following the U.S. Sentencing Guidelines and considering various statutory elements. The Department of Justice underscored that the platform was employed to legitimize money derived from different criminal endeavors such as cyber breaches, ransom payments, and drug trafficking. Its source being the U.S. Department of Justice Crime Division. The DOJ investigation disclosed BTC-e's lack of critical legal compliance protocols, including registrations with the Financial Crimes Enforcement Network (FinCEN), and the adoption of Anti-Money Laundering (AML) or Know Your Customer (KYC) regulations. This lack of regulation was attractive to those needing to secretly conduct monetary transactions. Vinnik also set up multiple shell companies and financial accounts globally, facilitating unofficial fund transfers via BTC-e. This led to unlawful costs totaling a minimum of $121 million. Vinnik has been caught up in legal matters for five years, accused of being the intellectual architect behind BTC-e. The crypto exchange is whispered to have benefited from multiple unauthorized activities exploiting the platform to launder about $4 billion in Bitcoin. Vinnik was apprehended on accusations of money laundering in Greece in 2017 under U.S. jurisdiction and extradited to France in 2020. Although he was acquitted of ransom-related charges in France, he was found guilty of money laundering offenses and given a five-year prison term. His lawyers' appeal for reducing his involvement to just a worker at BTC-e, unconnected to any unlawful actions, was dismissed. After spending two years in a French jail, he was extradited to the U.S. on Aug 5, 2022. The Justice Department applauded the Greek government for their help with Vinnik's extradition. He had previously endeavored to arrange a prisoner trade off between the U.S. and Russia. U.S. officials have pursued comparable criminal allegations against other crypto platforms and their respective heads. On March 28, one-time FTX CEO Sam Bankman-Fried got 25 years for seven felony infractions.
Published At
5/4/2024 12:48:14 PM
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