Alexander Vinnik has pleaded guilty to money laundering conspiracy over the unethical use of the BTC-e Crypto exchange.
BTC-e was a popular cryptocurrency exchange that operated from 2011 until its closure in 2017. It was one of the oldest and most prominent platforms for trading various cryptocurrencies including Bitcoin, Litecoin and Ethereum. However, BTC-e faced legal hurdles due to allegations of money laundering activities on the platform. Some investigations have also shown an alleged connection with the Mt.Gox Bitcoin exchange hack. In 2017, the US government seized the BTC-e domain and halted all crypto trading activities. Since then, BTC-e has been defunct and its closure marked an important event in the history of the crypto world.
On May 4, 2024, the US Department of Justice (DOJ) announced multiple charges against BTC-e founder Alexander Vinnik.
Initial investigations by enforcement agencies revealed that the BTC-e Crypto exchange was used to launder $9 billion in crypto assets under Alexander’s direction.
The US DOJ noted that the crypto exchange BTC-e was running without proper registration and compliance and there was also no KYC barrier, making it easy for bad actors to use BTC-e to move money from one country to to launder the other country.
According to the investigative report, nearly $4 billion of the $9 billion transactions on this crypto exchange were part of money laundering, facilitating the illegal transfer of funds through BTC-e, resulting in criminal losses totaling at least $121 million .
It is worth knowing that Alexander was arrested in Greece in 2017 and later extradited to France in 2020. In France he was sentenced to five years in prison for money laundering, but after serving two years in a French prison he was extradited to the US in August 2022.
In the past, Alexander, a Russian citizen, once tried to trade himself for someone else in a prisoner-swap deal between Russia and the United States, but his plan somehow backfired.
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