Financial Crimes Enforcement Network Demands Multimillion
CryptoBit News Today1 min read
WASHINGTON — FinCEN, part of the U.S. Treasury, has assessed a $110,003,314 civil money penalty against BTC-e, a foreign digital currency exchange, and a $12 million penalty against its Russian operator, Alexander Vinnik. FinCEN asserts the company willfully violated U.S. anti-money laundering laws.
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FinCEN Acting Director Jamal El-Hindi stated that the agency will hold foreign-based money transmitters and virtual currency exchangers operating in the United States responsible when they intentionally violate American anti-money laundering laws.
Vinnik was taken into custody in Greece following a criminal inquiry conducted by the IRS Criminal Investigation Division, the FBI, the U.S. Secret Service, and Homeland Security Investigations.
FinCEN found that it failed to obtain required information on customers and enabled its users to process over 300,000 bitcoin tied to theft, among other violations. One of the major offenses, according to the Treasury, is that although BTC-e conducted over $296 million in bitcoin transactions alone, it never registered with the Financial Crimes Enforcement Network, as all money services businesses operating in the United States must do. Rather than combating money laundering, BTC-e and its management welcomed rampant criminal transactions, with customer service representatives even providing guidance on how to process proceeds from darknet drug sales.
Since 2011, BTC-e handled around 700,000 customers across the globe, yet it failed to put an effective anti-money laundering compliance program in place.
In total, FinCEN regulates foreign-located exchangers that conduct substantial business within the United States under BSA AML safeguards.
Headquartered in Russia, BTC-e facilitated transactions among users in the U.S. and around the world since its founding in 2011. Officials say BTC-e operated as an unregistered foreign money transmitter and failed to file suspicious activity reports, serving as a hub for ransomware proceeds and cybercrime schemes.
