$110 million US indictment against BTC-e links back to MtGox scandal – “unplanned maintenance” looking to stretch out

$110 million US indictment against BTC-e links back to MtGox scandal – “unplanned maintenance” looking to stretch out

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.

BTC-e indictment, MtGox sacnadal, Vinnik, money laundering

Featured image from the CFA Institute

About The Author

Daniel Dalton

Daniel is a well-oiled robot that believes in the power of blockchain technologies. Likes decentralization, hodling and BIPs. Dislikes red tape, corporate stuffiness and oxidation

  • Daniel Dalton

    Hi guys,

    As usual, always happy to continue the discussion down here! Fire away.

  • Eddie J

    I don’t believe this is a move to protect consumers, as I always trusted btc-e despite it not being regulated.

    • Daniel Dalton

      Yes, I believe this is the overarching theme with a lot of the actions taken by the SEC and other legislators, hence hinting at the ulterior motives behind the usage of the word “safeguards”

  • Steve Hunter

    I honestly have no idea how they plan to try to regulate a decentralized global trading platform without essentially adopting socialist laws and procedures. I hope they take an “adapt” stance instead of a “let’s derail this before it takes off” stance.

    • Daniel Dalton

      Hey Steve! Thanks for your input.

      I think only time can tell, within the group of US regulators there’s definitely a larger portion that wish to do the latter rather than the former. There is still a glimmer of hope though. Check out the latest report from one of our writers who attended the DC Blockchain conference last week – https://cryptoinsider.com/fear-hope-dc-blockchain-conference/

Press Releases

Subscribe