Executive Summary
Between 2011 and 2017, BTC-e operated as one of the largest laundering hubs in the cryptocurrency world. With no meaningful customer due diligence, transaction monitoring, or regulatory oversight, the exchange processed over $9 billion in transactions, much of it linked to ransomware, darknet markets, hacked exchanges, and large scale fraud.
At the center was Alexander Vinnik, a Russian national who managed administrative accounts and payment systems. U.S. prosecutors argued that BTC-e was not just negligent, it was intentionally designed to serve criminals seeking anonymity and speed.
This case remains a landmark, setting a precedent that crypto exchanges can be prosecuted as active money laundering conspirators, not just passive facilitators. It also reshaped global regulatory standards, influencing enforcement in the U.S., UK, and Australia.
For compliance teams, BTC-e underscores how weak KYC, opaque ownership, and fragmented systems allow illicit finance to thrive, and why regulators now expect crypto controls to meet the same standards as traditional financial institutions.
