U.S. Sues Crypto Exchange For Civil Penalties

The United States has filed a civil action against cryptocurrency exchange BTC-e (which the U.S. has determined to be a Money Services Business) and its previously criminally indicted owner Alexander Vinnik, a Russian national, “to recover civil money penalties imposed under the Currency and Foreign Transactions Reporting Act of 1970 (aka the Bank Secrecy Act).

BTC-e_Seizure_Banner

Rules issued under the BSA require the registration of MSBs, the filing of Suspicious Activity Reports (“SARs”), the implementation of anti-money laundering (“AML”) programs, and the maintenance of records related to transmittals of funds.

The U.S. alleges that BTC-e “obscured and anonymized transactions and sources of funds” and that “significant portion of BTC-e’s business was derived from suspected criminal activity.”

Customers located within the United States used BTC-e to conduct at least 21,000 bitcoin transactions worth over $296,000,000 and tens of thousands of transactions in other convertible virtual currencies.”

The government is asking for a civil penalty of more than $100 million.

(Photo: By U.S. Law Enforcement – https://btc-e.com/index.html, Public Domain, https://commons.wikimedia.org/w/index.php?curid=61846279)

Read the civil complaint here:

https://www.scribd.com/document/419868940/US-vs-BTC-e-Vinnik?campaign=SkimbitLtd&ad_group=100652X1574425X582f425cba1c257bc2798360105d9463&keyword=660149026&source=hp_affiliate&medium=affiliate

About JeffKoeppel

I am a corporate/securities attorney in the Washington, DC area. Prior to joining the firm, I was a Senior Attorney Advisor in the Division of Corporation Finance at the U.S. Securities and Exchange Commission. I am a member of the Bars of the States of Maryland, New York and the District of Columbia. You can also follow this blog on LinkedIn at: http://www.linkedin.com/pub/jeffrey-a-koeppel/0/63/5a9
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