A Russian national who operated the crypto exchange BTC-e in the United States has pled guilty to charges of money laundering conspiracy. The exchange, one of the world’s largest between 2011 and 2017, processed transactions worth $9 billion and had over 1 million customers worldwide. Prosecutors claim that BTC-e was utilized by cyber criminals to transfer, launder, and store proceeds from illegal activities, such as hacking, ransomware, and narcotics distribution.
The Russian national, Alexander Vinnik, ran the exchange until his arrest and the shutdown of BTC-e by law enforcement. Vinnik, who was sentenced to five years in imprisonment for money laundering in France in 2020, now faces a maximum of 20 years in prison in the U.S. Prosecutors assert that Vinnik operated BTC-e with the intention to promote unlawful activities and was responsible for a loss amounting to at least $121 million.
According to the statement by the U.S. Attorney’s office in San Francisco, BTC-e did not have a proper vetting system in place and allowed criminals to convert illicit cash into cryptocurrencies anonymously. The exchange was found to have handled Bitcoin associated with a Russian military intelligence hacking unit responsible for releasing Democrats’ emails during the 2016 U.S. elections.
In recent months, there has been increased scrutiny and regulatory action against cryptocurrency-related fraud in the United States. Several notable figures in the crypto space have faced legal consequences, including the co-founder of FTX who was sentenced to 24 years in prison for orchestrating a multi-billion dollar fraud scheme, and the founder of Terraform Labs who was found liable for fraud in a civil case.
Additionally, the founder of Binance, one of the world’s largest crypto exchanges, was sentenced to four months in prison this week for failing to prevent illicit activities on the platform. Binance paid a significant fine and agreed to increased monitoring. Former SEC Division of Enforcement Assistant Director Jennifer Lee also mentioned that if Donald Trump is re-elected as President, the U.S. Securities and Exchange Commission will continue to assert its authority over the crypto space.
