BTC-e operator Alexander Vinnik pleads guilty to money laundering conspiracy

Alexander Vinnik, one of the operators behind the former cryptocurrency exchange BTC-e, pleaded guilty on Friday to conspiracy to commit money laundering, the US Department of Justice announced.

Vinnik operated BTC-e between 2011 and 2017, the DOJ said, and during that time the exchange handled more than 1 million users who made more than $9 billion in crypto transactions.

BTC-e was linked to the hack of the now defunct crypto exchange Mount Gox after it was used to launder approximately 300,000 (BTC) from Mount Gox. BTC-e was shut down in July 2017, at the same time Vinnik was first arrested.

While Vinnik was arrested in Greece, he faced a lengthy extradition process, with American, Russian and French authorities trying to convince Greece to send him to their respective countries. France secured Vinnik’s extradition and sentenced him to five years in prison, before Vinnik was sent back to Greece before eventually being extradited to the US. He initially denied being an operator of BTC-e and said he was just an employee of the exchange.

BTC-e did not register as a money services company in the U.S., did not have know-your-customer or anti-money laundering rules and did not collect customer data, the DOJ said Friday. Vinnik used shell companies to process fiat conversions for BTC-e, the DOJ added.

The press release stated that the exchange received money from criminal activities, including ransomware attacks, hacks and other schemes, and that Vinnik was directly responsible for approximately $121 million in losses.

In a statement, Deputy Attorney General Lisa Monaco said: “Today’s outcome demonstrates how the Department of Justice, in collaboration with international partners, is reaching around the world to combat crypto crime. This guilty plea reflects the Department’s continued commitment to use all tools to combat money laundering. monitors the crypto markets and demands restitution for victims.”