BTC-e founder pleaded guilty to money laundering after an investigation revealed the exchange’s involvement in unlawful activities.
Alex Vinnik, BTC-e founder has entered a guilty plea to the charge of money laundering conspiracy. This comes after a more comprehensive investigation that uncovered a significant amount of unlawful operations on the exchange between 2011 and 2017.
BTC-e Founder Pleads Guilty
The Department of Justice (DOJ) of the United States of America noted in a news release on May 3 that under BTC-e Founder leadership, Bitcoin Ethereum (BTC-e) completed more than $9 billion worth of transactions and had a user base exceeding one million worldwide, including a significant number of users located in the United States.
The Department of Justice learned that people were using the platform to launder money from a range of illegal activities, including illicit drug trafficking, ransomware attacks and computer hacking.
According to the Department of Justice (DOJ), an investigation discovered that BTC-e operated without necessary legal compliance procedures.
These measures included registration with the Financial Crimes Enforcement Network (FinCEN) and Anti-Money Laundering (AML) or Know Your Customer (KYC) protocols.
The fact that BTC-e had these weaknesses contributed to its popularity among people who wanted to conceal their financial activities from law enforcement authorities.
Additionally, investigators determined that Vinnik had established numerous shell companies and financial accounts worldwide. These activities made it possible for him to move cash illegally through BTC-e, which resulted in criminal losses amounting to at least 121 million dollars.
For the past five years, BTC-e founder has been involved in a number of court challenges due to allegations that he was the genius behind the Bitcoin exchange known as BTC-e.
According to reports, the cryptocurrency exchange made a profit from a variety of illegal activities that utilized the platform to finance the laundering of approximately $4 billion worth of Bitcoin.
On suspicion of money laundering, Greece detained Vinnik in 2017. In 2020, they deported him to France. France found Vinnik not guilty of the ransomware allegations but found him guilty of money laundering and sentenced him to five years in prison for his actions.
The attorneys for Vinnik filed an appeal, which was ultimately unsuccessful. They argued that Vinnik was merely an exchange employee and had no role in any illegal actions that took place at BTC-e.
He arrived in the United States of America on August 5, 2022 having served a two-year sentence in a French jail. Vinnik, who is a Russian citizen, has previously attempted to negotiate a prisoner exchange deal in order to be considered for inclusion in a prisoner trade agreement between Russia and the United States.
Authorities in the United States have filed criminal charges against cryptocurrency exchanges and executives in a similar manner. Seven criminal accusations led to the sentence of 25 years in prison for former FTX CEO Sam Bankman-Fried on March 28.