The United States filed a complaint this week against the BTC-e cryptocurrency exchange and its alleged operator Alexander Vinnik, seeking to recover civil monetary penalties assessed by the Financial Crimes Enforcement Network (FinCEN) in July 2017.
In its complaint, filed in the U.S. District Court in the Northern District of California, the government asked the Court to “award Plaintiff judgments against BTC-e and Alexander Vinnik in the amounts of $88,596,314 and $12,000,000, respectively, plus interest as provided by law, and award such other relief as the Court deems just and proper, including Plaintiff’s costs.”
The U.S. has accused Vinnik of operating BTC-e as an unlicensed money services company and engaging in a money laundering conspiracy. The filing alleges that Vinnik and his exchange made no attempt to comply with FinCEN registration requirements, monitor and report suspicious transactions, or follow appropriate anti-money-laundering practices:
BTC-e had no policies or procedures for conducting due diligence or monitoring transactions for suspicious activity. On some occasions, BTC-e customers contacted BTC-e’s administration with questions regarding how to process and access proceeds obtained from the sale of illegal drugs and from transactions on known “darknet” illegal markets, including Silk Road. In addition, BTC-e’s customers openly discussed using BTC-e to facilitate illegal activity on BTC-e’s own internal messaging system, as well as on its public user chat system. Nevertheless, BTC-e did not implement any policies or procedures to monitor its platform for suspect activity.
Vinnik, a Russian national whose exchange is no longer in operation, is currently being held by Greek authorities while he awaits a final determination on extradition. Several nations, including the United States, France, and his native Russia, have all filed extradition claims since his arrest in Greece two years ago.