Top Bitcoin Exchange Operator Busted on $4 Billion Money Laundering Charge

A Russian “internationally sought ‘mastermind’ of a crime organisation” accused of laundering more than $4 billion in bitcoin, has been arrested in Greece, reports The Guardian.

A US jury indicted Alexander Vinnik on Wednesday after his arrest in a small beachside village in northern Greece on Tuesday, following an investigation led by the US justice department along with several other federal agencies and task forces.

Vinnik was described by the justice department as the operator of BTC-e, an exchange used to trade the digital currency bitcoin since 2011, which was allegedly used to launder more than $4bn for people involved in crimes ranging from computer hacking to drug trafficking.

Coindesk explains BTC-e:

BTC-e: Once one of bitcoin's largest exchanges, little is known about BTC-e despite the fact that it has operated one of the most consistently available ways to exchange fiat currency for bitcoin and other cryptocurrencies. BTC-e does not take customer information, and its location and employee structure are unknown (though it has long been suspected of operating out of eastern Europe)....

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 cryptocurrency markets as having relaxed standards for checking users’ identity, and for not collaborating with law enforcement.

I repeat what I have written many times: You are really delusional if you think Bitcoin or any other e-currency is going to protect your transactions from snooping eyes.

Bitcoin is an extremely trackable currency.

It appears that the US government is now moving on a number of multi-year Bitcoin investigations.

Last week I reported that two of the biggest dark web marketplaces for drugs, guns etc. were taken down by American and European authorities, AlphaBay and Hansa, and the principals arrested.

AlphaBay founder Alexandre Cazes committed suicide in his jail cell shortly after he was arrested. He was 25 years old.

There are probably more busts to come. I'm thinking big names.

   -RW