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Alexander Vinnik, a Russian national who operated the BTC-e crypto exchange, pleaded guilty to money laundering conspiracy charges in the United States on May 3, according to Bloomberg. report.
BTC-e was one of the world's largest crypto exchanges between 2011 and 2017. According to prosecutors, it processed transactions worth $9 billion and had more than 1 million customers worldwide.
Prosecutors added that BTC-e was used by cybercriminals to transfer, launder and store criminal proceeds from illegal activities. This included proceeds from hacking, ransomware and narcotics distribution.
According to a statement from the San Francisco U.S. Attorney's Office, Vinnik operated the exchange until he was arrested and BTC-e was shut down by law enforcement. Vinnik, sentenced to five years in prison for money laundering in France in 2020, faces a maximum sentence of 20 years in prison in the United States
The statement noted:
“Vinnik operated BTC-e with the intent to promote these illegal activities and was responsible for a loss of at least $121 million.”
Prosecutors say BTC-e lacked a control system and allowed criminals to anonymously convert illicit money into cryptocurrencies like Bitcoin. Prosecutors said the exchange manipulated Bitcoin attributed to a Russian military intelligence hacking unit tasked with leaking Democrats' emails during the 2016 U.S. election in an attempt to influence votes.
In recent months, cryptocurrency fraud has come under increased scrutiny and regulatory action in the United States. Sam Bankman-Fried, co-founder of the now-defunct cryptocurrency exchange FTX, was sentenced to 24 years in prison in March for orchestrating a multi-billion-dollar fraud scheme.
Additionally, Do Kwon, the founder of Terraform Labs, was found liable for fraud in a civil case in April 2024. Terraform Labs collapsed in 2022, triggering a chain of bankruptcies and wiping $40 billion from the market.
Most recently, Changpeng Zhao (CZ), the founder of Binance, one of the world's largest crypto exchanges, was sentenced this week to four months in prison for failures that enabled illicit activities, including the financing of crime and terrorism, to occur on the platform. CZ had already pleaded guilty while Binance paid the largest fine in history and agreed to be monitored.
Additionally, Jennifer Lee, former deputy director of the SEC's enforcement division, said this week that if Donald Trump is elected president for a second term this year, the Securities and Exchange Commission (SEC) United States would continue to “define its space and expand into crypto.”
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