Russian citizen Alexander Vinnik and BTC-e, the Bitcoin exchange he allegedly controlled, have been charged in a 21-count indictment for money laundering, operating an unlicensed money service business, and related crimes, the DoJ reported.
BTC-e was founded in 2011 and was one of the largest and most broadly used digital currency exchanges in the world. According to the indictment, it allowed users to anonymously trade Bitcoin and built a customer base of mostly cybercriminals. Users did not have to validate their identities, could anonymize transactions and sources of funds, and avoid anti-money laundering processes. BTC-e receives more than $4B in Bitcoin over the course of its operation.
The indictment also alleges Vinnik received funds from the hack of Mt. Gox, an earlier digital currency exchange that failed. He allegedly laundered those funds through several online exchanges, including BTC-e and Tradehill, another failed change based in San Francisco.
"Mr. Vinnik is alleged to have committed and facilitated a wide range of crimes that go far beyond the lack of regulation of the bitcoin exchange he operated," says Chief Don Fort, IRS Criminal Investigation. "Through his actions, it is alleged that he stole identities, facilitated drug trafficking, and helped to launder criminal proceeds from syndicates around the world."
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