A Belarusian and Cypriot national allegedly connected with the defunct cryptocurrency exchange BTC-e is in U.S. custody and faces charges related to money laundering, federal prosecutors said Thursday.
Aliaksandr Klimenka, 42, is accused of helping to run BTC-e, which was “a significant cybercrime and online money laundering entity that allowed its users to trade in bitcoin with high levels of anonymity and developed a customer base heavily reliant on criminal activity,” according to the Department of Justice.
Klimenka was originally indicted in 2022, and that document was unsealed Thursday.
Prosecutors previously alleged that from 2011 to 2017, bitcoins stolen during an infamous attack on another exchange, Mt. Gox, were used to prop up the BTC-e operation. A suspect in that case, Alexander Vinnik, is accused of laundering $4 billion in digital currency through BTC-e and last year asked to be considered in a potential prisoner swap with Russia.
The DOJ accused two other Russian nationals in the Mt. Gox case last year.
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Klimenka was arrested in Latvia on December 21 and made an appearance in a San Francisco federal court on Wednesday, the department said. He faces up to 25 years in prison if convicted on all counts of money laundering conspiracy and operation of an unlicensed money services business.
He also allegedly controlled Soft-FX, a technology services company, and FX Open, a financial company, the DOJ said.
“BTC-e’s servers, maintained in the United States, were allegedly one of the primary ways in which BTC-e and its operators effectuated their scheme,” the department said. “Those servers were allegedly leased to and maintained by Klimenka and Soft-FX.”
The DOJ announcement reiterates the government’s stance that BTC-e was in violation of multiple federal rules.
“Despite doing substantial business in the United States, BTC-e allegedly was not registered as a money services business with the U.S. Department of Treasury, had no anti-money laundering process, no system for appropriate ‘know your customer’ or ‘KYC’ verification, and no anti-money laundering program as required by federal law,” the department said.
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Joe Warminsky is the news editor for Recorded Future News. He has more than 25 years experience as an editor and writer in the Washington, D.C., area. Most recently he helped lead CyberScoop for more than five years. Prior to that, he was a digital editor at WAMU 88.5, the NPR affiliate in Washington, and he spent more than a decade editing coverage of Congress for CQ Roll Call.