Belarus and Cyprus Citizen Accused of Money Laundering Through BTC-e
The U.S. authorities have charged Alexander Klimenko, a citizen of Belarus and Cyprus, in connection with the cryptocurrency exchange BTC-e. Klimenko is accused of participating in an international cybercrime operation involving money laundering.
According to the U.S. Department of Justice, Klimenko was linked to BTC-e, the technology services company Soft-FX, and the financial company FX Open. The indictment alleges that Klimenko, through these firms, facilitated transactions related to various cybercrimes, including extortion, identity theft, illegal drug trafficking, fraud, and hacking.
BTC-e primarily served the Russian market and was shut down by U.S. law enforcement in 2017 after its owner, Alexander Vinnik, was arrested in Greece. At the time, the U.S. Department of Justice claimed that the platform was used to launder funds stolen during the hack of the Japanese cryptocurrency exchange Mt. Gox, as well as to pay ransoms related to extortion operations such as Locky, Cerber, NotPetya, WannaCry, and Spora.
Although BTC-e operated in the United States, it was not registered with the U.S. Department of the Treasury as a financial services provider. The exchange did not require users to undergo KYC (know your customer) identity verification and lacked anti-money laundering mechanisms.
“BTC-e allegedly facilitated transactions for cybercriminals worldwide and received criminal proceeds from numerous computer attacks and hacking incidents, extortion, identity theft, corrupt government officials, and drug distribution networks. It was also allegedly used to facilitate various crimes, from computer hacking to fraud, identity theft, tax refund schemes, corruption, and drug trafficking,” the U.S. Department of Justice stated.
According to law enforcement, the 42-year-old Klimenko controlled BTC-e from 2011 until July 2017, up to Vinnik’s arrest and the subsequent shutdown of the site. Authorities believe he managed and operated U.S.-based servers that supported BTC-e’s operations through his company Soft-EX.
On December 21, 2023, Klimenko was arrested in Latvia at the request of the United States and has already appeared before a court in San Francisco. If convicted of conspiracy to launder money and operating an unlicensed money services business, he faces a maximum sentence of 25 years in prison.