The operator of Bulgarian cryptocurrency exchange BTC-e has been extradited from Greece to the United States, where he faces charges of operating an unlicensed money service business and money laundering.
Russian national Alexander Vinnik worked with the BTC-e exchange and was responsible for laundering more than $4 billion in criminal funds. The U.S. Department of Justice’s Office of International Affairs and the Greek government made extradition from Greece possible.
Criminal activity and law enforcement actions have shaken the cryptocurrency industry in recent weeks. Coinbase has been the subject of an SEC investigation over an alleged sale of unregistered securities, while a former employee has been charged with insider trading.Many investors have archive Filed a lawsuit against the exchange seeking to recover losses from unregistered securities issued by the exchange.
On August 1, 2022, the SEC filed a civil lawsuit against 11 individuals accusing them of operating Forsage, a $300 million Ponzi scheme, and pyramid schemes.
BTC-e suffers from poor AML/KYC rules
Vinnik and his co-conspirators own and operate BTC-e, an exchange that offers a high degree of anonymity, making it fertile ground for criminal activity, including profiting from hackers, ransomware attacks, identity theft, and drug cartels. The exchange processed over $4 billion in transactions during its operation. It is not registered with the U.S. Treasury Department as a money services business. Its anti-money laundering and know-your-customer policies are poor.
Vinnik and BTC-e are charged Conspiracy to launder money and one count of operating an unlicensed financial business. Separately, Vinnik was charged with 17 counts of money laundering and two counts of illegal currency dealing.
He appears in a San Francisco courthouse on Friday, August 6, 2022.
The FBI, IRS Criminal Investigation, Homeland Security Bureau of Investigation and U.S. Secret Service Criminal Investigation Bureau are investigating the case.
Vinnik has been targeted by authorities since 2017
Vinnik worked at BTC-e in Bulgaria from 2011 to 2017, was charged with 21 counts in 2017, and was arrested by Greek authorities at the request of the United States in July of that year. He denied all allegations at the time.
In 2017, FinCEN launched an investigation into BRC-e for intentional violations of anti-money laundering laws and Vinnik’s involvement in the violations.financial network smooth $110M charges against BTC and $12M fine against Vinnik.
A civil case calling for fines against BTC-e and Vinnik is awaiting a ruling from the Northern District of California.
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