Vinnik, who remains in custody in Greece as governments worldwide jockey to extradite him, stands accused of laundering billions of dollars worth of cryptocurrency stolen from other exchanges, most notably Mt. Gox.
The $100 million civil suit, which the Department of Justice filed in the Northern District of California, targets BTC-e for offering services to US residents without abiding by US financial regulations, including declining to register with FinCEN as a Money Services Business, failing to establish anti-money laundering procedures as stipulated under the Bank Secrecy Act (BSA), and failing to report suspicious activities.
From the complaint:
“At no point in time did BTC-e have any AML policies or procedures, let alone an effective program for detecting and preventing suspicious transactions. To the contrary, BTC-e’s lax policies encouraged persons engaged in criminal activity to use its services, and BTC-e became the virtual currency exchange of choice for criminals looking to launder their illegal proceeds.”
FinCEN had levied $88.6 million in penalties against BTC-e and $12 million in penalties against Vinnik, and the DOJ says that the lawsuit intends to “enforce” those fines.
President Trump, as CCN reported, recently said that he is “not a fan” of bitcoin. Treasury Secretary Steven Mnuchin warned that the government would ensure “very, very strong” enforcement of financial regulations governing cryptocurrency usage.
Vinnik was arrested in 2017 while vacationing in Greece. He has sought extradition to his home country of Russia, where he is wanted on charges much less serious than the nearly two dozen criminal allegations he faces in the US.
Notably, BTC-e’s troubles appear to have continued even after its demise. The bitcoin exchange was later resurrected as WEX, whose most recent operator - Dmitry Vasilyev - was just arrested in Italy this month, according to a report from BBC Russia.
Read the full complaint below: