US officials Thursday hailed the arrest and indictment of a Russian accused of laundering billions of dollars through a Bitcoin exchange he operated.
Treasury Secretary Steven Mnuchin said cracking down on illegal uses of the cyber currency is a key goal of US regulators.
“I share your concerns about Bitcoin and others and them being used for illicit activity,” Mnuchin said in testimony before Congress.
“This is going to be a big priority of ours,” he said, pointing to the “major action” involving the Russian national.
Greek police arrested Alexander Vinnik on Tuesday to face US charges. He was found in the tourist resort of Halkidiki, near the northern city of Thessaloniki.
A US court indicted him Wednesday on 21 charges including money laundering and other crimes using BTC-e, an exchange he operated for the Bitcoin crypto-currency.
Vinnik, 37, “is alleged to have committed and facilitated a wide range of crimes,” Don Fort, chief of the Internal Revenue Service Criminal Investigation, said in a statement by the multiple agencies involved in the investigation.
Among the charges are that “he stole identities, facilitated drug trafficking, and helped to launder criminal proceeds from syndicates around the world.”
In addition, BTC-e “was noted for its role in numerous ransomware and other cyber-criminal activity,” said Michael D’Ambrosio, head of the Criminal Investigative Division of the US Secret Service, which though best known for protecting the president, was started to investigate counterfeit currency.
Asked about the extradition process from Greece, a US Justice Department spokesman would say only that Vinnik is in Greek custody.
The indictment said Vinnik is a primary owner of BTC-e’s managing shell company, Canton Business Corporation, and “was heavily reliant on criminals” engaged in identity theft and drugs, as well as corrupt public officials.
BTC-e, founded in 2011, was one of the world´s largest and most widely used digital currency exchanges, and reaped proceeds “from well-known hacks and thefts from bitcoin exchanges.”
“The investigation has revealed that BTC-e received more the $4 billion worth of bitcoin over the course of its operation.”
Vinnik also was charged with receiving funds from the infamous hack of Mt. Gox — an earlier digital currency exchange that eventually failed, in part due to losses attributable to hacking.
In addition to the charges, the Treasury Department fined BTC-e $110 million for “willfully violating” US anti-money laundering laws, and fined Vinnik $12 million.
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