Russian Admits to $9B Crypto Laundering Scheme in US Guilty Plea

• Russian national Alexander Vinnik has admitted to crypto money laundering via BTC-e.
• U.S. prosecutors said BTC-e facilitated over $9B in transactions and catered to over 1 million users globally.
• Vinnik is now facing the possibility of a 20-year prison sentence at his upcoming sentencing in the U.S.

Russian national Alexander Vinnik has admitted to participating in a crypto-related money laundering scheme, U.S. prosecutors disclosed . Vinnik admitted his involvement with BTC-e, one of the biggest Bitcoin exchanges active from 2011 to 2017.

According to a statement from the U.S. Attorney’s office in San Francisco, Vinnik was among the operators of BTC-e until law enforcement intervened, closing the exchange and arresting him. Prosecutors revealed that BTC-e facilitated over $9 billion in transactions and catered to over 1 million users globally.

The prosecution has characterized BTC-e as a major conduit for cybercriminals worldwide. It enabled them to transfer, cleanse, and hide illicit proceeds from criminal activities, including hacking, ransomware offenses, and drug trafficking. 

Additionally, the platform is implicated in processing Bitcoin that has been linked to a Russian military intelligence unit accused of meddling in the 2016 US presidential election by leaking Democratic Party emails. 

According to official statements, Vinnik deliberately managed BTC-e to support criminal activities, contributing to financial losses estimated at a minimum of $121 million. He is now facing the possibility of a 20-year prison sentence at his upcoming sentencing in San Francisco. Previously, in 2020, Vinnik was convicted of money laundering charges in France, where he was handed a five-year prison term.

The latest announcement from the U.S. follows the country’s intensifying efforts to combat cryptocurrency-related fraud. Notably, Sam Bankman-Fried, co-founder of FTX, received a 25-year prison sentence in March for his role in a multibillion-dollar fraud. 

Similarly, Terraform Labs and its co-founder Do Kwon were recently found liable for fraud in a civil trial regarding the firm’s collapse. Terraform’s crypto projects LUNA and stablecoin UST imploded in May 2022, which resulted in the loss of $40 billion in investor funds.

Additionally, this week, Changpeng Zhao, the founder of Binance, was sentenced to four months in prison. This is due to lapses that permitted illicit actors, including criminals and terrorists, to utilize the services of Binance, the world’s preeminent crypto exchange.