BTC-e Operator Indicted Following Tuesday Arrest


Alexander Vinnik, the 38-year-old Russian man behind the bitcoin exchange BTC-e, has been arrested and indicted. Reuters reported news that a U.S. jury made the decision on Wednesday (July 26).

As PYMNTS previously reported, a U.S. Justice Department investigation led to Vinnik’s arrest in a small beachside village in Northern Greece on Tuesday, thanks to a tip-off received by police.

The BTC-e virtual currency exchange has been used to trade the cryptocurrency since 2011, in which time Vinnik allegedly bitcoin laundered more than $4 billion worth of the digital coin. Officials said that Vinnik and his firm had received those funds and done substantial business in the U.S. without following proper protocol for avoiding money laundering.

U.S. authorities are also saying that Vinnik had connections to the Japan-based cryptocurrency exchange Mt. Gox, which was hacked in 2014 and subsequently collapsed. After the cybercrime incident, Vinnik allegedly obtained funds from Mt. Gox and money laundered them through BTC-e, as well as the San Francisco-based exchange Tradehill, which the Russian cybercriminal also reportedly owned.

This just adds to recent cybersecurity victories by American and European authorities, which earlier this month shut down two of the largest online black markets conducting business using virtual currency.

The first of these was AlphaBay, which was shut down in early July following the arrest of its Canadian founder Alexandre Cazes, 25, in Bangkok, where he was living. Cazes was found to have committed suicide in his jail cell before he could be indicted.

The second cybersecurity victory was Hansa Market, the dark web Walmart to AlphaBay’s evil Amazon, where many AlphaBay “refugees” fled after their primary marketplace was shut down. But it turned out that the Dutch police had been controlling Hansa since June and had been gathering information on vendors and customers as they flocked in from AlphaBay before shutting down the site on July 20.