The Treasury, for the first time, has taken legal action against a foreign-located money services business.
On July 26, 2017, the Financial Crimes Enforcement Network (FinCEN) announced the assessment of a $110,003,312 civil money penalty against BTC-e, or Canton Business Corporation (BTC-e) for “willfully violating U.S. anti-money laundering (AML) laws.”
FinCEN worked in coordination with the U.S. Attorney’s Office for the Northern District of California. According to official documents, Russian national Alexander Vinnik was indicted along with BTC-e “in the Northern District of California under 18 U.S.C. §§ 1956, 1957, and 1960 for money laundering, conspiracy to commit money laundering, engaging in unlawful monetary transactions, and the operation of an unlicensed money transmitting business.” Vinnik was arrested earlier today in Greece on a U.S. warrant. FinCEN assessed a $12 million penalty against Vinnik for his “role in the violations.”
Acting director of FinCEN Jamal El-Hindi warned that the organization will hold accountable foreign-located money transmitters and virtual currency exchangers doing business with the U.S. when they willfully violate U.S. AML laws. He said:“This 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.”
FinCEN played a role with law enforcement with respect to the seizure of BTC-e and the arrest of Vinnik. Furthermore, the Internal Revenue Service-Criminal Investigation Division, Federal Bureau of Investigation, United States Secret Service, and Homeland Security Investigators cooperated in the conduct of t...