Alexander Vinnik, a Russian national, pleaded guilty to conspiracy to commit money laundering related to his involvement in operating the cryptocurrency exchange BTC-e from 2011 to 2017.

Court documents reveal that Vinnik, 44, was one of the key operators of BTC-e, which once stood as one of the world’s largest virtual currency exchanges. During its operation, BTC-e processed over $9 billion in transactions and served more than one million users globally, including a significant number of customers within the United States. BTC-e was linked to the hack of the now-defunct crypto exchange Mt. Gox after it was used to launder some 300,000 bitcoins obtained through the breach. BTC-e was shut down in July 2017, at the same time Vinnik was first arrested.

BTC-e was known as a primary facilitator for cybercriminals seeking to transfer, launder, and store proceeds from illicit activities. It became a hub for criminal enterprises engaged in various illegal activities, including computer intrusions, ransomware attacks, identity theft schemes, corruption, and narcotics distribution rings.

According to the US Department of Justice, Vinnik operated BTC-e with the intent to promote these unlawful activities and was responsible for a loss of at least $121 million. Officials say that BTC-e failed to comply with federal regulations by not registering as a money services business with the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).

Furthermore, BTC-e lacked essential anti-money laundering (AML) and “know-your-customer” (KYC) processes, making it a go-to platform for those seeking to conceal the origins of criminal proceeds. The exchange collected minimal customer data, aiding individuals looking to evade law enforcement scrutiny.

In 2017, FinCEN imposed hefty penalties on BTC-e. Specifically, the crypto exchange faced an approximately $110 million civil money penalty for willfully violating U.S. AML laws, while Vinnik himself was slapped with a $12 million civil penalty for his complicity in these violations.

Alexander Vinnik was arrested in Greece in July 2017 under an international warrant issued by the US for his involvement in running BTC-e. Following the years-long extradition battle between the US, Russia and France, Vinnik was sent to France in 2020, where he was sentenced to five years in prison and a fine of €100,000. He was then sent back to Greece before being eventually extradited to the United States.

In February 2024, the US charged Aliaksandr Klimenka, a Belarusian, and Cypriot national, with money laundering conspiracy and operating an unlicensed money services business. Klimenka, along with Alexander Vinnik and others, is alleged to have controlled BTC-e as well as Soft-FX, a technology services company, and FX Open, a financial company, between 2011 and July 2017. Klimenka was arrested in Latvia in December 2023 at the request of the United States and made his initial appearance in San Francisco. If convicted, he could face a maximum penalty of 25 years in prison.