Bitcoin
BTC-e Crypto Exchange Operator Pleads Guilty to Money Laundering in US
Alexander Vinnik, a Russian national who operated cryptocurrency exchange BTC-e, pleaded guilty to money laundering conspiracy charges in the US on May 3, according to a Bloomberg report. report.
BTC-e was one of the world’s largest cryptocurrency exchanges between 2011 and 2017. According to prosecutors, it processed transactions worth $9 billion and had a customer base of more than 1 million worldwide.
Prosecutors added that BTC-e was used by cyber criminals to transfer, launder and store criminal proceeds from illegal activities. This included revenues from hacking, ransomware and narcotics distribution.
According to a statement from the US Attorney’s Office in San Francisco, Vinnik operated the exchange until he was arrested and BTC-e was shut down by authorities. Vinnik, sentenced to five years in prison for money laundering in France in 2020, faces a maximum of 20 years in prison in the US
The statement noted:
“Vinnik operated BTC-e with the intent to promote these illegal activities and was responsible for a loss of at least $121 million.”
Prosecutors claim that BTC-e lacked a verification system and allowed criminals to convert illicit money into cryptocurrencies like Bitcoin anonymously. Prosecutors said the exchange was found to have manipulated Bitcoin traced back to a Russian military intelligence hacking unit responsible for releasing Democratic emails during the 2016 US election in an attempt to influence votes.
In recent months, there has been increasing scrutiny and regulatory action against cryptocurrency-related fraud in the US. Sam Bankman-Friedthe co-founder of the now-defunct cryptocurrency exchange FTX, was sentenced to 24 years in prison in March for orchestrating a multibillion-dollar fraud scheme.
Additionally, Do Kwonthe founder of Terraform Labs, was found responsible for fraud in a civil case in April 2024. Terraform Labs went bankrupt in 2022, triggering a chain of bankruptcies and wiping out $40 billion from the market.
More recently, Changpeng Zhao (CZ), the founder of Binance, one of the largest cryptocurrency exchanges in the world, was sentenced this week to four months in prison for failures that allowed illicit activities, including criminal and terrorist financing, to occur on the platform. CZ had previously pleaded guilty while Binance paid the largest fine in history and agreed to be monitored.
Additionally, former Assistant Director of the SEC Division of Enforcement Jennifer Lee he said this week that if Donald Trump is elected president for a second term this year, the US Securities and Exchange Commission (SEC) will continue to “define its space and catch up with crypto.”