Following an investigation that was led by the United States Justice Department, Vinnik was brought into custody from a small beachside village in northern Greece on Tuesday, July 25. Confiscated from his hotel room were four credit cards, five mobile phones, one camera, one router, two laptops, and two tablets, KeepTalkingGreece.com reported.
A Justice department statement said Vinnik is the operator of BTC-e, which is an online exchange that is used to trade the digital currency bitcoin since 2011. Vinnik and his firm allegedly received over $4 billion in bitcoin and failed to follow proper protocols regarding money laundering and other crimes.
Vinnik was also said to have “obtained” money through hacking Mt. Gox – a Japan-based bitcoin exchange that shut down in 2014 after it was hacked – and laundering it through BTC-e and Tradehill, which is another of his San Francisco, California-based exchanges.
Vinnik on Wednesday, July 26 received a 21-count indictment over crimes that ranged from computer hacking to drug trafficking, a report from Reuters.com showed. He can be charged with 17 counts of money laundering and two counts of engaging in unlawful monetary transactions. He and his holding company, Boston, Massachusetts-based Canton Business Corp., are each facing one count of operating an illegal money transfer service.
The Financial Crimes Enforcement Network (FinCEN) compared the perpetrators' operation to that of the criminal underworld, saying in a statement, “Instead of acting to prevent money laundering, BTC-e and its operators embraced the pervasive crimnal activity conducted at the exchange. Users openly and explicitly discussed criminal activity on BTC-e's user chat."
"BTC-e's customer service representatives offered advice on how to process and access money obtained form illegal drug sales on dark net markets like Silk Road, Hansa Market, and AlphaBay,” the statement added.
For their part, prosecutors for the Northern District of California said BTC-e “functioned as the exchange of choice to convert digital currencies like bitcoin to fiat money for the criminal world, especially by those who committed their crimes online.” (Related: Bitcoin crashes over 50% just one day after bold public prediction by Mike Adams of Natural News.)
Canton is facing a $110 million fine from FinCEN; Vinnik had been fined $12 million.
If found guilty of his charges, Vinnik can face up to 55 years in a U.S. prison, according to CoinDesk.com.
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