Home Insights DOJ Sues BTC-e & Alexander Vinnik for $100 Million

DOJ Sues BTC-e & Alexander Vinnik for $100 Million

by Matthew Harris

In a move that will likely please numerous crypto investors around the world, the Department of Justice has made a strong move against the man accused of laundering billions of dollars worth of stolen crypto.

David L. Anderson, a United States Attorney, and U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) Director Kenneth A. Blanco, announced on Friday that they have filed a civil complaint against crypto-exchange BTC-e.

Specifically naming both Canton Business Corporation, BTC-e’s “parent” company, as well as its chief owner Alexander Vinnik, the complaint seeks to enforce monetary penalties for alleged violations of the Bank Secrecy Act.

The civil suit, which the Department of Justice filed in the Northern District of California, seeks to enforce the monetary penalties issued by FinCEN in their findings from 2017. At that time, FinCEN assessed $12 million in penalties against Vinnick and $88,596,314 in penalties against BTC-e, resulting in the subsequent filing of the $100 million civil suit.

The initial penalties were leveraged based on FinCEN findings that BTC-e offered services to US-based customers without abiding by the required financial regulations. These violations include Vinnik allegedly operating several BTC-e accounts associated with thefts resulting from hacks of virtual currency exchanges like Mt. Gox, as well as failing to register as a Money Services Business with FinCEN, failing to comply with the Bank Secrecy Act (BSA) by establishing anti-money laundering procedures, and failing to report suspicious activities.

Vinnik is currently in custody in Greece, where he has now been for right at two years, and fighting extradition attempts by France, the United States, and Russia as well. Greek leadership placed Alexander under arrest on July 25th 2017 on a warrant issued by the U.S. Department of Justice but France also has an extradition request due to accusations that Vinnik is guilty of cybercrime and money laundering in that country.

In February of this year, Russia’s Commissioner for Human Rights, Tatyana Moskalkova, asked the Greek Ministry of Justice to extradite Vinnik to Russia as well, so it remains to be seen if any of this will matter in the end.
Due to the conflicting extradition requests, his ultimate extradition is likely to be decided by the country’s Minister of Justice or, possibly, the Greek leadership.

As of last reporting, Vinnik was hoping to be extradited back to his home country of Russia, claiming the charges are unfounded and that his life is endangered. Additionally, his lawyers also argue that he has been held for longer than Greece law allows.

And his lawyers may well be on to something. A lawsuit filed in Cyprus against Alexander Vinnik was reportedly withdrawn by the plaintiffs this past November and the court ordered that Vinnik receive compensation for incurred legal costs resulting from the suit.

The accusations against BTC-e are a stain on the industry and hopefully Greece will do the right thing and extradite him to the US for his day in court. If he truly is guilty, he needs to pay the highest possible price and two years in a Greek prison isn’t it.

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