Bitcoin

Crypto Under Fire: Latest Exchange Charged In US Money Laundering Scandal

2 Mins read

In a significant crackdown on crypto-related crime, the U.S. Department of Justice announced charges against Aliaksandr Klimenka, a 42-year-old Belarusian and Cyprus national.

Unsealed indictments reveal Klimenka’s alleged involvement in a money laundering conspiracy and the operation of BTC-e, an unlicensed digital currency exchange, alongside Alexander Vinnik and other associates from 2011 to July 2017.

Crypto Bitcoin BTC BTCUSDT
BTC’s price trends to the upside on the daily chart. Source: BTCUSDT on Tradingview

US Takes Aims At Another Crypto Exchange

BTC-e is accused of being a nexus for cybercrime and money laundering by the US Justice, allegedly offering high anonymity trading services that attracted a clientele deeply entrenched in illegal activities.

The platform reportedly facilitated financial transactions stemming from a gamut of criminal endeavors, including computer hacking, fraud, identity theft, and drug trafficking, the press release claims.

Authorities highlight BTC-e’s role in cybercrimes, emphasizing its operation on U.S. servers allegedly without adherence to mandatory anti-money laundering protocols and “know your customer” (KYC) practices.

In addition, the government agency claims that despite its significant operations within the United States, BTC-e allegedly failed to register as a money services business, flouting federal laws requiring stringent anti-money laundering measures.

The US Department of Justice believes that Klimenka’s arrest in Latvia last December marks a critical step in their “efforts to combat cryptocurrency-facilitated crimes.”

Currently held in custody following his initial court appearance in San Francisco, Klimenka faces a daunting maximum sentence of 25 years if convicted. The charges underscore the U.S. government’s intensified focus on digital asset crimes, with the National Cryptocurrency Enforcement Team (NCET) spearheading investigations into the misuse of cryptocurrencies.

The collaborative efforts of the U.S. Secret Service, FBI, IRS Criminal Investigation, and Homeland Security Investigations highlight “the federal commitment to dismantling networks that leverage digital currencies for illegal activities.” the press release emphasized.

Crypto Use In Illegal Activity Drops To Lowest Levels

Despite the US government statement, recent data from crypto analysis firm Chainalysis indicates that a small percentage of blockchain transactions are used for criminal activity.

In 2023, the value received by “illicit addresses” amounted to $24 billion, mainly from “sanctioned entities” by the US government. This represents an important decline from its 2022 value, which stood at almost $40 billion, as seen in the chart below.

crypto crime US Bitcoin BTC BTCUSDT
The transaction volume of cryptocurrencies associated with criminal activity has declined since 2022. Source: Chainalysis

Only 0.34% of all crypto transaction volume was allegedly used for illegal activities. This number represents a blow to the narrative that digital assets are vital in allowing criminals to support their operations.

Chart from Tradingview


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