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).


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:


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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