BTC-e founder pleads guilty in $9 billion fraud conspiracy

Alexander Vinnik, the founder of the Russian illegal crypto exchange, BTC-e, has pleaded guilty to illegal currency exchange. The admission follows a wide-ranging investigation that uncovered widespread irregularities at the exchange from 2011 to 2017.

According to the United States Department of Justice (DOJ), during Vinnik's leadership, BTC-e handled more than $9 billion in transactions and a user base of more than one million globally, with the largest number of users in the United States. A federal district court judge determines the sentence based on the US Sentencing Guidelines and other statutory factors.

The United States Department of Justice has highlighted the use of funds from a variety of criminal activities, including computer hacking, ransomware attacks and drug trafficking.

According to the DOJ, BTC-e operates without required legal compliance measures, including registration with the Financial Crimes Enforcement Network (FinCEN) and implementation of anti-money laundering (AML) or know-your-customer (KYC) protocols.

These flaws have made BTC-e popular among individuals who want to hide their transactions from law enforcement. It was also discovered that Vinnik had set up several shell companies and financial accounts worldwide, which allowed him to launder money through BTC-e. This activity resulted in at least $121 million in criminal losses.

Vinnik has been embroiled in legal battles over the past five years as the main developer of BTC-e. The cryptocurrency exchange allegedly used its platform to launder $4 billion worth of bitcoins and profit from various illegal activities.

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Vinnik In 2017, he was arrested by the US on charges of money laundering in Greece and extradited to France in 2020.

Vinnik's lawyers launched an unsuccessful appeal, maintaining that Vinnik was only an employee of the exchange and had no involvement in BTC-e's illegal activities. After spending two years in a French prison, he was extradited to the US on August 5, 2022.

The Department of Justice has cooperated with the Greek government in extraditing Vinnik to the United States. Vinnik previously tried to get a prisoner exchange agreement to be considered part of the prisoner trade agreement between Russia and the United States.

US authorities have filed similar criminal charges against crypto exchanges and their executives. On March 28, former FTX CEO Sam Bankman-Fried was sentenced to 25 years in prison on seven felony charges.

Magazine: US law enforcement agencies are turning up the heat on crypto-related crimes.