In all the noise about the BTC-e shutdown and the arrest of Vinnik, the Financial Crimes Enforcement Network (FinCEN) are further showcasing the heavy-handed stance the US will take on all matters crypto. Both BTC-e and Vinnik have been indicted on 21 charges of money laundering, with BTC-e deemed as a compliant party for “operating an unlicensed money service business”.
Need to be caught up? What links could BTC-e and the MtGox hack possibly have in common? Bitcoin security specialists at WizSec declared that recently arrested Alexander Vinnik is likely also responsible for siphoning illicitly gained funds out of the MtGox hack over three years ago. WizSec came out of a two-year long hiatus from Twitter to make the announcement, stating that “Vinnik is our chief suspect for involvement in the MtGox theft… With such an arrest actually happening, we think today might — finally — be the day when we can begin talking about what we’ve actually been doing all this time and what we found.”
US to hold “foreign money transmitters” accountable
Fast developments from the arrest show that US regulators are taking this opportunity to lay down the law. In a similar theme to the SEC ruling on ICOs and the AlphaBay shutdown, the Department of Justice has issued a quick ruling despite being normally being a slow-moving and bureaucratic institution. In the release, a full indictment was issued with FinCEN declaring a $110 million assessment to be levied against BTC-e and $12 million against Vinnik for their roles in the violations.
“Today’s action should be a strong deterrent to anyone who thinks that they can facilitate ransomware, dark net drug sales, or conduct other illicit activity using encrypted virtual currency. Treasury’s FinCEN team and our law enforcement partners will work with foreign counterparts across the globe to appropriately oversee virtual currency exchangers and administrators who attempt to subvert U.S. law and avoid complying with U.S. AML safeguards.”
Jamal El-Hindi, Acting FinCEN Director
The ongoing media trend is to focus on the controversy surrounding BTC-e and the links to MtGox. But more worryingly, this swift ruling is indicative of an ongoing regulatory crackdown across the board. While this case may see long-awaited justice served, reading between the lines shows aggressive expansion of regulatory “safe guards” for crypto adopters in the US.
Amidst unheard cries of “where’s my money!?”, it’s safe to say that the BTC-e “unplanned maintenance” is looking to stretch out longer than the estimated 5-10 days.
Featured image from the CFA Institute