A US jury on Wednesday indicted a Russian man as the operator of a digital currency exchange he allegedly used to launder more than US$4 billion for people involved in crimes ranging from computer hacking to drug trafficking.
Alexander Vinnik was arrested on Tuesday in a small beachside village in northern Greece, according to local authorities, following an investigation led by the US Department of Justice, along with several other federal agencies and task forces.
US officials described Vinnik in a Department of Justice statement as the operator of BTC-e — an exchange used to trade the digital currency bitcoin since 2011.
They alleged Vinnik and his firm “received” more than US$4 billion in bitcoin and did substantial business in the US without following appropriate protocols to protect against money laundering and other crimes.
US authorities also linked him to the failure of Mt. Gox, a Japan-based bitcoin exchange that collapsed in 2014 after being hacked. Vinnik “obtained” funds from the hack of Mt. Gox and laundered them through BTC-e and Tradehill, another San Francisco-based exchange he owned, they said in the statement.
It was not possible to reach Vinnik for comment.
“Just as new computer technologies continue to change the way we engage each other and experience the world, so too will criminals subvert these new technologies to serve their own nefarious purposes,” said Brian Stretch, US Attorney for the Northern District of California, where Vinnick was indicted in the statement.
Greek police described Vinnik as a “an internationally sought ‘mastermind’ of a crime organization.”
His arrest is the latest in a series of US operations against Russian cybercriminals in Europe. Last week, the US Department of Justice moved to shut down the dark Web marketplace AlphaBay.
The prosecutions also coincide with intensified scrutiny of Russian hackers after US intelligence officials determined that Moscow interfered in last year’s presidential election using cyberwarfare methods to help Donald Trump, something Moscow denies.
During his time in the digital currency market, US authorities allege Vinnik faciliated crimes, including hacking, fraud, identity theft, tax refund fraud, public corruption and drug trafficking.
BTC-e, which has been out of service for more than a day, attributed this to “unplanned maintenance.” In a tweet on Wednesday after the arrest of Vinnik, BTC-e said it would restore service in the next five to 10 days.
The exchange is one of the oldest virtual currency platforms. It allows users to trade bitcoin pseudonymously against a variety of fiat and virtual currencies, and is known in crypto-currency markets as having relaxed standards for checking users’ identity and for not collaborating with law enforcement.
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