On Friday, July 26, the US filed a civil lawsuit against a cryptocurrency exchange platform that was helping criminals launder moneyderived from illegal activities, such as ransomware, money from selling drugs on the dark web , and more.
The lawsuit seeks to recover $88,596,314 from the accounts of the BTC-e exchange platform and $12 million from Alexander “Mr. Bitcoin” Vinnick, founder and CEO of BTC-e.
The amount represents a fine imposed by the US Treasury's Financial Crimes Enforcement Network (FinCEN) in 2017, when the FBI shut down BTC-e's portal and Greek authorities arrested Vinnick.
For the past two years, the US Department of Justice has been trying to bring Vinnick before a US court to face the charges against him. However, they have been unsuccessful.
In fact, Greece's supreme court decided last year to send Vinnick to Russia, his country of origin, where the charges against him are much less severe and therefore his sentence will be similar.
The civil lawsuit, filed by the US, is an alternative legal method to ensure the Treasury Department receives compensation if the case is reopened.
BTC-E was used for money laundering
These fines were imposed because BTC-e violated the Bank Secrecy Act (BSA). Initially, the exchange platform was not registered as a Money Services Business (MSB), even though it was regularly used by American consumers.
Then, it did not implement any program to prevent money laundering by criminals.
Finally, it did not report any suspicious activity, while there had been too many illegal transactions on its platform.
When authorities shut down BTC-e in 2017, the official website said the platform had handled over $7 billion in Bitcoin. The U.S. Department of Justice found that over $4 billion, more than half of the funds that had passed through the platform, came from illegal transactions.
After BTC-e was shut down, several reports were published about illegal transactions taking place through the platform. In fact, at the Black Hat USA 2017 conference, it was revealed that 95% of all ransomware money had passed through Vinnik's BTC-e.
Additionally, WizSec said that BTC-e was also used to launder money stolen from other exchange platforms.
also accused Vinnick of allowing users and drug gangs to use accounts on his platform, helping criminals transfer money that was being sought by police.
