BTC-e Co-founder Enters Guilty Plea For $9 Billion Money Laundering Conspiracy

Co-founder of crypto exchange BTC-e, Alexander Vinnik, has pleaded guilty to charges of conspiracy to commit money laundering. In a public release by the US Department of Justice (DOJ) on May 3, the Russian national has admitted to his role as one of the operators of BTC-e, facilitating $9 billion worth of illicit transactions between 2011 to 2017 on the crypto trading platform.

Vinnik’s Role In BTC-e’s “Criminal” Operations – US DOJ

According to the DOJ, before its closure in 2017, BTC-e was one of the major money-transmitting platforms for cybercriminals across the world. The US authorities claimed the crypto exchange processed funds from several forms of bad actors including hackers, scammers, corrupt civil servants, and drug dealers.

The DOJ stated that as an operator of BTC-e, Vinnik was an ally of these criminals resulting in the loss of $121 million. They stated that to facilitate shady transactions, BTC-e lacked any anti-money laundering (AML) protocols and was not registered as a money transmitter platform with the US Financial Crimes Enforcement Network (FinCEN), despite having a significant portion of US citizens in its customer base.

The US prosecutors also highlighted that the crypto exchange worked with several unregistered shell companies with no KYC policies or AML measures in transferring funds for its million customers. In particular, they claim that Vinnik was responsible for establishing many of these shell companies which aided the operations of the BTC-e exchange. 

Commenting on Vinnik’s guilty plea, Deputy Attorney General Lisa Monaco commended the DOJ’s efforts in fighting against crimes involving the use of digital assets.

Monaco said: 

Today’s result shows how the Justice Department, working with international partners, reaches across the globe to combat crypto crime. This guilty plea reflects the Department’s ongoing commitment to use all tools to fight money laundering, police crypto markets, and recover restitution for victims.

What Next For Vinnik?

Vinnik was first apprehended by Greek authorities in 2017 on allegations of money laundering based on a US arrest warrant. In 2020, the BTC-e co-founder was extradited to France where he was acquitted of charges of crypto-ransomware but found guilty of money laundering, leading to a five-year jail sentence.

After a two-year service in French prison, Alexander Vinnik was finally transferred to the United States. During his time in North America, Vinnik attempted to undergo a prisoner trade swap involving the US and the Russian Federation. 

However, following Vinnik’s admission of conspiracy to commit money laundering through the BTC-e exchange, the Russian citizen shall now await judgment following a US federal district court judge in line with constitutional guidelines and other legislative principles.