The saga of the infamous BTC-e cryptocurrency exchange and its embattled founder rages on as new charges are brought against the organization. Among the charges are several counts each of money laundering, conspiracy, unlawful transactions, and operating while unlicensed. The charges are brought by the US Treasury, and they aim to show that BTC-e engaged in years of unlawful activity and showed total disregard for the regulations that are put in place to protect both the exchange and the consumers.
One of the more concerning charges brought against Vinnik include allegations that he and the exchange knowingly accepted and moved funds for some of the most dangerous people and organizations in the world who engage in illegal activities such as drug trade, money laundering, hacking, and terrorism.
Another fact brought to light by the investigation reveals that BTC-e received funds from the Mt. Gox hack that ultimately ended the life of the exchange. Instead of taking steps to be a legitimate exchange and service for people to safely transact legal funds, BTC-e knowingly advertised themselves as a way to circumvent the law and transact cryptocurrencies anonymously, providing a haven for those involved in the illegal and dangerous activities that drew attention to BTC-e in the first place.
The willingness for BTC-e to be involved in these transactions made it a destination for criminals rather than a legitimate exchange, and leaning into that fact didn’t help BTC-e at all in the courts. They also failed to properly notify authorities when it was clear that illegal activity was being discussed in their moderated chat room.
With all of the evidence that US attorneys have presented and plan to reveal still, it’s not likely that the outcome for BTC-e is favorable. All eyes are sure to be on this ongoing investigation as an example of what can happen to a cryptocurrency exchange when they fail to comply with basic safeguards for consumers and the economy. Currently, Vinnik owes over $88 million in civil fines and they are sure to pile up as the investigation goes on.