Security & Fraud

New Zealand Seizes $90M In Bitcoin Fraud Case

bitcoin

New Zealand police have frozen $90 million they say belongs to alleged bitcoin scammer Alexander Vinnik in what’s being called the country’s largest money seizure ever.

Vinnik, who’s currently held in France but wanted in the United States and his native Russia, allegedly laundered billions of dollars through BTC-e, one of the world’s largest digital-currency trading exchange, the Associated Press reported Monday (June 22).

“New Zealand Police has worked closely with the Internal Revenue Service of the United States to address this very serious offending,” New Zealand Police Commissioner Andrew Coster said in a statement. “These funds are likely to reflect the profit gained from the victimization of thousands, if not hundreds of thousands, of people globally as a result of cyber-crime and organized crime.”

Vinnik has denied the allegations, saying he was merely a consultant to the BTC-e platform and unaware of any illegal activity, according to the AP.

But the U.S. Justice Department last year filed a civil complaint in federal court against Vinnik and a company he allegedly runs called Canton Business Corp. for violations of the Bank Secrecy Act.

Prosecutors allege Vinnik operated BTC-e without anti-money laundering (AML) controls and policies, which resulted in criminals laundering proceeds derived from illegal activities. Authorities also claim Vinnik operated several BTC-e accounts, including some tied to thefts from other virtual currency exchanges such as Mt. Gox, the bitcoin exchange based in Japan.

In 2017, Vinnik was arrested while on vacation in Greece at the request of U.S. authorities, AP reported. Also that year, the U.S. Treasury’s Financial Crimes Enforcement Network fined Vinnik $12 million and BTC-e a $88.6 million penalty.

After a two-year legal tussle, Vinnik was extradited to France from Greece, where French officials had filed preliminary charges of money laundering and extortion against him, the AP said. Once the French case is completed, Vinnik is expected to be moved to the United States and later to his native Russia, the report said.

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