The DOJ has accused Aliaksandr Klimenka of running an unlicensed money business and money laundering through BTC-e. Klimenka’s arrest in Latvia marks a crucial point in the case; He could face up to 25 years in prison if convicted. The case follows DOJ actions against Changpeng Zhao and Binance, illustrating a broader strategy to combat cryptocurrency misuse.
The United States Department of Justice (DOJ) has continued its scrutiny against illicit actors in the cryptocurrency ecosystem by filing charges against Aliaksandr Klimenka, a Belarusian and Cypriot citizen. The DOJ alleges involvement in a complex money laundering scheme through the BTC-e cryptocurrency exchange.
This recent legal action signals the continuation of the crackdown on illicit financial activities in the cryptocurrency sector, and marks another important step following the notable case against Changpeng Zhao, former CEO of Binance.
USA: Cryptocurrency Exchange Faces “Money Laundering” Charges
Klimenka, 42, now faces serious charges. These range from running an unlicensed money business to money laundering conspiracy.
The indictment, unsealed on Tuesday, claimed that Klimenka and Alexander Vinnik controlled BTC-e from 2011 to July 2017. This exchange is labeled as a hub for cybercrime and money laundering. In addition, it promised anonymity to users and attracted a criminal clientele.
BTC-e is accused of serving as a financial conduit for a range of criminal activities, including hacking incidents, ransomware scams, identity theft schemes, corrupt public officials, and narcotics distribution rings, and allegedly was used to facilitate crimes ranging from computer hacking to fraud, identity theft, tax refund fraud schemes, public corruption, and drug trafficking. The indictment explains that the US BTC-e servers were key to these illegal activities. Klimenka and his company, Soft-FX, allegedly rented and cared for these servers.
Furthermore, BTC-e was operating in the United States without following the necessary legal guidelines. In particular, it lacked anti-money laundering measures, customer identification checks or compliance programs:
“Despite carrying out important operations in the United States, BTC-e was not registered as a money services company with the Treasury Department, it did not have an anti-money laundering process, it did not have a verification system” “know your customer” or “KYC,” and did not have an anti-money laundering program, as required by federal law.”
Klimenka’s arrest in Latvia on December 21, 2023 marks a critical juncture in this case, following his extradition to the United States, where he now faces judicial proceedings. The seriousness of the charges against him could carry a maximum penalty of 25 years in prison.
The Justice Department’s Office of International Affairs worked with the Latvian government to secure Klimenka’s arrest.
This case emerged following the DOJ’s actions against Changpeng Zhao and the Binance exchange in 2023, illustrating a broader strategy to combat the misuse of digital assets.
In late 2023, the US District Court declared that Zhao and Binance allegedly violated the Commodity Exchange Act and CFTC regulations. This resulted in a $150 million civil monetary penalty against Zhao personally.
USA: The Binance Exchange Former CEO Case
Zhao’s guilty plea for violating the Bank Secrecy Act and Binance’s agreement to pay a $4.3 billion fine represent historic moments in cryptocurrency sector regulation.
The creation of the National Cryptocurrency Enforcement Team (NCET) further exemplifies the Department of Justice’s commitment to addressing cryptocurrency-related crimes. The NCET focuses on curbing the illicit use of cryptocurrencies and digital assets.
In addition, NCET collaborates with both national and international organizations. Its goal is to spearhead strategies against the misuse of digital currencies by hackers.
By Leonardo Perez
