US indicts suspected Russian 'mastermind' of $4 billion bitcoin laundering scheme

US indicts suspected Russian 'mastermind' of $4 billion bitcoin laundering scheme
Russian man (C) suspected of running a money laundering operation, is escorted by plain-clothes police officers to a court in Thessaloniki, Greece July 26, 2017.
PHOTO: Reuters

NEW YORK/ATHENS/MOSCOW - A US jury indicted a Russian man on Wednesday as the operator of a digital currency exchange he allegedly used to launder more than $4 billion (S$5.5 billion) for people involved in crimes ranging from computer hacking to drug trafficking.

Alexander Vinnik was arrested in a small beachside village in northern Greece on Tuesday, according to local authorities, following an investigation led by the US Justice Department along with several other federal agencies and task forces.

US officials described Vinnik in a Justice Department statement as the operator of BTC-e, an exchange used to trade the digital currency bitcoin since 2011.

They alleged Vinnik and his firm "received" more than $4 billion in bitcoin and did substantial business in the United States without following appropriate protocols to protect against money laundering and other crimes.

US authorities also linked him to the failure of Mt. Gox, a Japan-based bitcoin exchange that collapsed in 2014 after being hacked. Vinnik "obtained" funds from the hack of Mt. Gox and laundered them through BTC-e and Tradehill, another San Francisco-based exchange he owned, they said in the statement.

It was not possible to reach Vinnik for comment.

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