November 30, 2023

The operator of a Bulgarian BTC-e cryptocurrency exchange has been extradited from Greece to the United States, where he faces charges of operating an unlicensed money supply business and money laundering.

Russian national Alexander Vinnik worked with the BTC-e exchange, responsible for laundering more than $4 billion in criminal funds. The US Department of Justice’s Office of International Affairs and the Government of Greece made the extradition from Greece possible.

Criminal activity and enforcement actions have rocked the crypto industry in recent weeks. Coinbase has been under investigation by the Securities and Exchange Commission for allegedly selling unregistered securities, and a former employee has been charged with insider trading. Several investors have filed action against the stock exchange, to recover damages from the offering of unregistered securities by the stock exchange.

On August 1, 2022, the Securities and Exchange Commission civilly indicted eleven individuals for operating Forsage, a $300 million Ponzi and pyramid scheme.

BTC-e suffered from poor AML/KYC rules

Vinnik and his associates owned and operated BTC-e, an exchange that offered a high degree of anonymity that made it fertile ground for criminal activities such as funneling proceeds from hacks, ransomware attacks, identity theft and drug syndicates. The exchange processed over $4 billion during its operations. It was not registered with the US Treasury Department as a financial services business. It had poor anti-money laundering and know-your-customer policies.

Vinnik and BTC-e are happening charged with conspiracy to commit money laundering and one count of operating a money laundering business without a license. Separately, Vinnik is charged with 17 counts of money laundering and two counts of illegal currency trading.

He appeared in a San Francisco court on Friday, August 6, 2022.

The case is being investigated by the Federal Bureau of Investigation, the Internal Revenue Service, Homeland Security Investigations and the Secret Service Criminal Investigation.

Vinnik has been targeted by the authorities since 2017

Vinnik worked at Bulgaria-based BTC-e from 2011-2017 and was indicted in 2017 on 21 charges and arrested by Greek authorities in July of that year at the request of the United States. At the time he denied all charges.

In 2017, FinCEN opened an investigation into BRC-e for knowingly violating anti-money laundering laws and against Vinnik for its involvement in the violations. FinCEN flattened $110 million charge against BTC and $12 million fine against Vinnik.

A civil case seeking monetary penalties against BTC-e and Vinnik is pending in the Northern District of California.

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