{"id":139,"date":"2017-07-27T19:50:01","date_gmt":"2017-07-27T19:50:01","guid":{"rendered":"http:\/\/ielrblog.com\/?p=139"},"modified":"2017-08-15T19:46:14","modified_gmt":"2017-08-15T19:46:14","slug":"treasury-departments-fincen-fines-russian-run-btc-e-virtual-currency-exchange-110-million-for-money-laundering-violations","status":"publish","type":"post","link":"https:\/\/ielrblog.com\/index.php\/2017\/07\/27\/treasury-departments-fincen-fines-russian-run-btc-e-virtual-currency-exchange-110-million-for-money-laundering-violations\/","title":{"rendered":"Treasury Department\u2019s FinCEN Fines Russian-run BTC-e Virtual Currency Exchange $110 Million for Money Laundering Violations"},"content":{"rendered":"<p>On July 26, 2017, the Financial Crimes Enforcement Network (FinCEN), a bureau of the United States Treasury Department, levied a $110 million civil penalty against BTC-e Virtual Currency Exchange and a $12 million penalty against its suspected operator, Russian national Alexander Vinnik, for willfully violating the Bank Secrecy Act. The Bank Secrecy Act requires financial institutions to assist the United States government in reporting and preventing suspected money laundering.<\/p>\n<p>A <a href=\"https:\/\/www.fincen.gov\/sites\/default\/files\/enforcement_action\/2017-07-26\/Assessment%20for%20BTCeVinnik%20FINAL%20SignDate%2007.26.17.pdf\">FinCEN\u00a0assessment<\/a>\u00a0alleges that senior leadership at BTC-e willfully failed to implement basic internal controls designed to prevent a money services business from facilitating money laundering. BTC-e failed to collect and verify customer verification information, as well as to implement procedures to identify and report suspicious transactions to authorities. The assessment\u00a0claims that as a result of these violations the cryptocurrency exchange \u201cattracted and maintained a customer base that consisted largely of criminals who desired to conceal proceeds from crimes such as ransomware, fraud, identity theft, tax refund fraud schemes, public corruption, and drug trafficking.\u201d<\/p>\n<p>Vinnik was arrested on Tuesday in northern Greece and indicted on Wednesday before a grand jury in Northern California. The<a href=\"https:\/\/www.justice.gov\/usao-ndca\/press-release\/file\/984661\/download\"> recently unsealed indictment<\/a> charges BTC-e and Vinnik with 21 counts, including one count of operation of an unlicensed money service business, one count of conspiracy to commit money laundering, seventeen counts of money laundering, and two counts of engaging in unlawful monetary transactions.<\/p>\n<p>The $110 million fine marks the Treasury Department\u2019s first penalty levied against a foreign-located money services business. According to a <a href=\"https:\/\/www.justice.gov\/usao-ndca\/pr\/russian-national-and-bitcoin-exchange-charged-21-count-indictment-operating-alleged\">Department of Justice press release<\/a>, Acting FinCEN Director Jamal El-Hindi stated that the FinCEN bureau \u201cwill hold accountable foreign-located money transmitters, including virtual currency exchangers, that do business in the United States when they willfully violate U.S. AML laws.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>On July 26, 2017, the Financial Crimes Enforcement Network (FinCEN), a bureau of the United States Treasury Department, levied a $110 million civil penalty against BTC-e Virtual Currency Exchange and a $12 million penalty against its suspected operator, Russian national Alexander Vinnik, for willfully violating the Bank Secrecy Act. The Bank Secrecy Act requires financial [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[4,11],"tags":[],"class_list":{"0":"post-139","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-money-laundering-and-bank-secrecy","7":"category-transnational-organized-crime-cybercrime-narcotics","8":"entry"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Treasury Department\u2019s FinCEN Fines Russian-run BTC-e Virtual Currency Exchange $110 Million for Money Laundering Violations | IELR Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ielrblog.com\/index.php\/2017\/07\/27\/treasury-departments-fincen-fines-russian-run-btc-e-virtual-currency-exchange-110-million-for-money-laundering-violations\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Treasury Department\u2019s FinCEN Fines Russian-run BTC-e Virtual Currency Exchange $110 Million for Money Laundering Violations | IELR Blog\" \/>\n<meta property=\"og:description\" content=\"On July 26, 2017, the Financial Crimes Enforcement Network (FinCEN), a bureau of the United States Treasury Department, levied a $110 million civil penalty against BTC-e Virtual Currency Exchange and a $12 million penalty against its suspected operator, Russian national Alexander Vinnik, for willfully violating the Bank Secrecy Act. The Bank Secrecy Act requires financial [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/ielrblog.com\/index.php\/2017\/07\/27\/treasury-departments-fincen-fines-russian-run-btc-e-virtual-currency-exchange-110-million-for-money-laundering-violations\/\" \/>\n<meta property=\"og:site_name\" content=\"IELR Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/m.facebook.com\/intlenforcementlawreporter\/?ref=bookmarks\" \/>\n<meta property=\"article:published_time\" content=\"2017-07-27T19:50:01+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2017-08-15T19:46:14+00:00\" \/>\n<meta name=\"author\" content=\"Zarine Kharazian\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@ielr\" \/>\n<meta name=\"twitter:site\" content=\"@ielr\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Zarine Kharazian\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/ielrblog.com\\\/index.php\\\/2017\\\/07\\\/27\\\/treasury-departments-fincen-fines-russian-run-btc-e-virtual-currency-exchange-110-million-for-money-laundering-violations\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/ielrblog.com\\\/index.php\\\/2017\\\/07\\\/27\\\/treasury-departments-fincen-fines-russian-run-btc-e-virtual-currency-exchange-110-million-for-money-laundering-violations\\\/\"},\"author\":{\"name\":\"Zarine Kharazian\",\"@id\":\"https:\\\/\\\/ielrblog.com\\\/#\\\/schema\\\/person\\\/d97d5908cb441bbcaed11eaad074b544\"},\"headline\":\"Treasury Department\u2019s FinCEN Fines Russian-run BTC-e Virtual Currency Exchange $110 Million for Money Laundering Violations\",\"datePublished\":\"2017-07-27T19:50:01+00:00\",\"dateModified\":\"2017-08-15T19:46:14+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/ielrblog.com\\\/index.php\\\/2017\\\/07\\\/27\\\/treasury-departments-fincen-fines-russian-run-btc-e-virtual-currency-exchange-110-million-for-money-laundering-violations\\\/\"},\"wordCount\":298,\"commentCount\":1,\"articleSection\":[\"Money Laundering &amp; 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