{"id":28099,"date":"2019-07-29T19:27:05","date_gmt":"2019-07-29T19:27:05","guid":{"rendered":"http:\/\/1a1f5f5f-dded-4e1e-810a-60fc3f82b2d6"},"modified":"2019-07-29T19:27:05","modified_gmt":"2019-07-29T19:27:05","slug":"us-files-lawsuit-against-bitcoin-exchange-that-helped-launder-ransomware-profits","status":"publish","type":"post","link":"https:\/\/www.threatshub.org\/blog\/us-files-lawsuit-against-bitcoin-exchange-that-helped-launder-ransomware-profits\/","title":{"rendered":"US files lawsuit against Bitcoin exchange that helped launder ransomware profits"},"content":{"rendered":"

\"bitcoin.jpg\"<\/span>Sebaztian Barns<\/span> <\/p>\n

The US Department of Justice has filed a civil lawsuit seeking to recover more than $100 million from a notorious cryptocurrency exchange that has helped cyber-criminals launder stolen funds, such as those obtained from ransomware payments, dark web drug marketplaces, and funds from hacked cryptocurrency exchanges.<\/p>\n

In a lawsuit<\/a> filed on Friday, July 26, the US wants to recover $88,596,314 from the accounts of the now-defunct BTC-e cryptocurrency exchange, and an additional $12 million from Alexander “Mr. Bitcoin” Vinnick, BTC-e’s founder and CEO.<\/p>\n

Lawsuit wants to recover US fine in a sinking legal case<\/h3>\n

The sum represents a fine that was imposed by the US Treasury’s Financial Crimes Enforcement Network (FinCEN) in 2017 when the FBI shut down the BTC-e portal, and Greek authorities arrested Vinnick.<\/p>\n

For the past two years, the DOJ has been trying to extradite Vinnick to the US to face charges, but with no success.<\/p>\n

In fact, in a shocking and unexpected decision, Greece’s highest court ruled last year to extradite Vinnick to Russia<\/a>, his home country, where he stands to face trial on much lighter charges than those brought forward by the US and France (also looking for Vinnick’s extradition).<\/p>\n

The DOJ’s civil lawsuit is an alternative legal method to make sure the US Treasury FinCEN recovers its due fine in the case US authorities opened in 2017.<\/p>\n

BTC-e was a hotbed for money laundering<\/h3>\n

Those fines were imposed because BTC-e violated the Bank Secrecy Act (BSA). First by not registering with US authorities as a Money Services Business (MSB), even if it catered to US consumers.<\/p>\n

\n<\/section>\n

Second, for failing to implement an anti-money laundering (AML) program in accordance with US and many other international standards.<\/p>\n

And third, for failing to file any suspicious activity report (SAR) for the numerous shady transactions that have happened on its platform.<\/p>\n

And there have been plenty of those.<\/p>\n

When authorities charged Vinnick and shut down BTC-e on July 26, 2017, the DOJ said that the platform, which claimed on its website to have handled over $7 billion worth of Bitcoin in its lifetime, had laundered criminal proceeds of more than $4 billion, representing more than half of the funds that have ever gone through its accounts.<\/p>\n

A day later after the BTC-e shutdown, a team of academics that also included Google staffers presented research at the Black Hat USA 2017 security conference, revealing that 95% of all ransomware ransom payments<\/a> that had been made up until that point had been cashed out and converted into fiat currency through Vinnik’s BTC-e portal.<\/p>\n

Furthermore, a similar investigation by a group of anonymous Bitcoin experts calling themselves WizSec published an investigation<\/a> linking Vinnik’s Bitcoin accounts to money laundering operations involving funds stolen from the (hacked) Mt. Gox exchange.<\/p>\n

In addition, WizSec also said BTC-e was involved in laundering funds stolen from other cryptocurrency exchanges, and not just Mt. Gox, such as Bitcoinica, Bitfloor, and other platforms they did not name at the time.<\/p>\n

And last but not least, the DOJ also blamed Vinnick<\/a> of allowing dark web drug marketplaces and drug cartels to operate accounts at his exchange, helping criminal gangs moves money undetected across borders.<\/p>\n

Related malware and cybercrime coverage:<\/h3>\n

READ MORE HERE<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

As “Mr. Bitcoin” seems destined to be extradited to Russia, US authorities are trying to recover some of BTC-e’s funds in a last ditch effort.
\nREAD MORE HERE…<\/p>\n","protected":false},"author":2,"featured_media":28100,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"colormag_page_layout":"default_layout","footnotes":""},"categories":[62],"tags":[],"class_list":["post-28099","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-zdnet-security"],"yoast_head":"\nUS files lawsuit against Bitcoin exchange that helped launder ransomware profits 2026 | ThreatsHub Cybersecurity News<\/title>\n<meta name=\"description\" content=\"ThreatsHub Cybersecurity News | ThreatsHub.org | Cloud Security & Cyber Threats Analysis Hub. 100% Free OSINT Threat Intelligent and Cybersecurity News.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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