Crypto exchange operator Alex Vinnik extradited to the US, is accused of money laundering
The operator of a Bulgarian cryptocurrency exchange BTC-e has been extradited from Greece to the United States, where he faces charges of operating an unlicensed money services business and money laundering.
Russian citizen Alexander Vinnik collaborated with the BTC-e exchange, responsible for laundering over $4 billion in criminal funds. The US Department of Justice’s Office of International Affairs and the Greek government made the extradition from Greece possible.
Criminal activity and enforcement actions have rocked the crypto industry in recent weeks. Coinbase has been the subject of an investigation by the Securities and Exchange Commission for allegedly selling unregistered securities, while a former employee has been charged with insider trading. Several investors have filed lawsuits against the exchange to recover compensation from the exchange’s offer of unregistered securities.
On August 1, 2022, the Securities and Exchange Commission civilly charged eleven people with running Forsage, a $300 million Ponzi and pyramid scheme.
BTC-e suffered from poor AML/KYC regulations
Vinnik and co-conspirators owned and operated BTC-e, an exchange that offered a high degree of anonymity that made it fertile ground for criminal activity, including the pursuit of proceeds from hacks, ransom attacks, identity theft and drug syndicates. The exchange processed over 4 billion dollars during its operation. It was not registered with the US Treasury Department as a money services business. It had poor anti-money laundering and know-your-customer policies.
Vinnik and BTC-e are charged with conspiracy to commit money laundering and one count of operating an unlicensed money business. Separately, Vinnik is charged with 17 counts of money laundering and two counts of illegal money transactions.
He appeared in a San Francisco court on Friday, June 6. August 2022.
The case is being investigated by the Federal Bureau of Investigation, Internal Revenue Service Criminal Investigation, Homeland Security Investigations and US Secret Service Criminal Investigation.
Vinnik has been in the authorities’ crosshairs since 2017
Vinnik worked at Bulgaria-based BTC-e from 2011-2017 and was charged in 2017 on 21 counts and arrested by Greek authorities in July of the same year at the request of the United States. He denied all the charges at the time.
In 2017, FinCEN opened an investigation into BRC-e for knowingly violating anti-money laundering laws and against Vinnik for his part in the violations. FinCEN issued a $110 million charge against BTC and a $12 million fine against Vinnik.
A civil suit seeking monetary penalties against BTC-e and Vinnik is pending in the Northern District of California.
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