DOJ Presses Charges Against Yet Another Crypto Exchange For Money Laundering

9 months ago 4

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The US Department of Justice (DOJ) has continued its scrutiny against the illicit actors in the crypto ecosystem by unveiling charges against Aliaksandr Klimenka, a Belarusian and Cypriot national. The DOJ alleges his involvement in a complex money laundering scheme through the BTC-e crypto exchange.

This recent legal action signals a continued crackdown on illicit financial activities within the cryptocurrency sector, marking another significant move after the notable case against Changpeng Zhao, the former CEO of Binance.

Crypto Exchange Operators Face Charges in Major Crypto Crime Crackdown

Klimenka, 42, is now central to serious accusations. These range from running an unlicensed money business to money laundering conspiracy.

The indictment, revealed on Tuesday, claims Klimenka and Alexander Vinnik controlled BTC-e from 2011 to July 2017. This crypto exchange is labeled a hub for cybercrime and money laundering. Moreover, it promised users anonymity and drew a criminal clientele.

BTC-e is accused of serving as a financial conduit for a gamut of criminal enterprises, including but not limited to computer hacking, fraud, identity theft, and drug trafficking. The indictment explains that BTC-e’s US servers were key to these illegal activities. Klimenka and his company, Soft-FX, supposedly leased and looked after these servers.

Adding to the charges, BTC-e did business in the US without following necessary legal guidelines. It notably lacked anti-money laundering measures, customer ID checks, or compliance programs.

“Despite doing substantial business in the United States, BTC-e allegedly was not registered as a money services business with the US Department of Treasury, had no anti-money laundering process, no system for appropriate “know your customer” or “KYC” verification, and no anti-money laundering program as required by federal law,” wrote DOJ.

Klimenka’s apprehension in Latvia on December 21, 2023, marks a critical juncture in this case, following his extradition to the US, where he now faces legal proceedings. The gravity of the charges against him could lead to a maximum sentence of 25 years in prison.

This case emerged after the DOJ’s actions against Changpeng Zhao and the Binance crypto exchange in 2023, illustrating a broader strategy to combat the misuse of digital assets. Zhao’s guilty plea to violating the Bank Secrecy Act and Binance’s agreement to a $4.3 billion fine represent landmark moments in the regulation of the crypto industry.

Establishing the National Cryptocurrency Enforcement Team (NCET) further exemplifies DOJ’s commitment to tackle crypto crimes. NCET focuses on curbing the illicit use of cryptocurrencies and digital assets.

Moreover, the NCET collaborates with agencies both domestically and internationally. Its goal is to spearhead strategies against criminals’ misuse of digital currencies.