Russian BTC-e Exchange Mastermind Arrested For Bitcoin Laundering

Photo credit: Alexandros Avramidis | Reuters

A 38 year old Russian man Alexander Vinnik who is suspected of running a money laundering ring has been arrested in Greece. As disclosed by police sources, the man was arrested on Wednesday on suspicion of anonymously laundering about $4 Billion using one of the world’s oldest cryptocurrency exchanges.

Police sources say he was arrested after a tip-off in a small beach side village in northern Greece on a US warrant. He is to be extradited to go face charges. He is touted in some circles as the mastermind behind the BTC-e exchange.

Sources close to the BTC-e virtual exchange who chose to remain anonymous whiles commenting on the on-going case stated that Vinnik was a key person behind the platform. BTC-e has however been offline since Tuesday on claims of “technical problems”.

“An internationally sought ‘mastermind’ of a crime organisation has been arrested” was the statement by the Greek police. “since 2011, the 38-year-old has been running a criminal organisation which administers  one of the most important website of electronic crime in the world”

The Police further stated that not less than $4 billion been laundered through the platform since 2011; with 7 million bitcoins deposited and 5.5 million bitcoins withdrawn.

Despite Bitcoin’s aim to push the envelope as far as financial transactions are concerned, news of this nature that tend to occur quite too frequently keeps giving cryptocurrency bad press.

Vennik’s arrest is the latest in a series of US-led arrests of Russians in Europe after the US Justice Department moved to shut down dark web market place AplhaBay.

BTC-e is regarded as one of the most obscure exchanges, allowing users to trade bitcoin anonymously against fiat currencies such as the US Dollar and Euro. BTC-e was founded in 2011 and until today the founders remained anonymous.

It is said that BTC-e has more relaxed standards of checking identity of its users. It is widely believed that the exchange is more lax in efforts to help combat money laundering.

James Smith, CEO of Elliptic (a company that works with law enforcement agencies to track illicit bitcoin transactions) says, “This helped make it “a favourite money-laundering location” and the exchange has been connected to recent ransomware attacks”