Belarusian Citizen Linked to BTC-e Faces 25 Years for $4 Billion Crypto Money Laundering

05 February 2024PressroomCryptocurrency/financial fraud

Crypto money laundering

A 42-year-old Belarusian and Cypriot citizen with alleged links to the now-defunct cryptocurrency exchange BTC-e is facing charges related to money laundering and operating an unlicensed money services business.

Aliaksandr Klimenkoarrested in Latvia on December 21, 2023, extradited to the United States. If convicted, he faces a maximum sentence of 25 years in prison.

BTC-e, operational since 2011, was seized by law enforcement in late July 2017 following the arrest of another key member, Alexander Vinnik, in Greece.

The exchange is alleged to have received deposits worth over $4 billion, while Vinnik laundered funds received from the hack of another digital exchange, Mt. Gox, through various online exchanges, including BTC-e.

Court documents allege that the exchange was a “significant cybercrime and online money laundering entity”, allowing its users to trade bitcoin with high levels of anonymity, thus building a customer base engaged in criminal activity.

Cyber ​​security

This included incidents of hacking, ransomware scams, identity theft schemes, and narcotics distribution rings.

“BTC-e’s servers, maintained in the United States, were allegedly one of the primary ways in which BTC-e and its operators carried out their plan,” the US Department of Justice (DoJ) said.

These servers were rented and maintained by Klimenka and Soft-FX, a technology services company controlled by the defendant.

BTC-e was also accused of failing to establish an anti-money laundering or know-your-customer (KYC) verification process in accordance with US federal laws.

In June 2023, two Russian citizens, Alexey Bilyuchenko and Aleksandr Verner, were charged for their roles in masterminding the 2014 Mt. Gox digital heist.

News of Klimenka’s indictment comes as the DoJ charges Noah Michael Urban, 19, of Palm Coast, Florida, with wire fraud and aggravated identity theft for crimes that resulted in the theft of $800,000 from at least five different victims including August 2022 and March 2023.

Urban, known by the aliases Sosa, Elijah, King Bob, Anthony Ramirez and Gustavo Fring, is said to be a key member of the cybercrime group known as Scattered Spider, according to KrebsOnSecurity, as well as a “core member” of a criminal ecosystem broader computer science industry that calls itself The Com.

Cyber ​​security

This also follows the Department of Justice’s announcement of charges against three individuals, Robert Powell, Carter Rohn and Emily Hernandez, in connection with a SIM swap attack targeting cryptocurrency exchange FTX to steal more than $400 million of dollars at the time of its collapse in 2022.

Powell (alias R, R$ and ElSwapo1), Rohn (alias Carti and Punslayer) and Hernandez (alias Em) are accused of running a massive cybercriminal theft ring called the Powell SIM Swapping Crew that orchestrated SIM swapping attacks between March 2021 and April 2023 and stole hundreds of millions of dollars from victims’ accounts.

Blockchain analytics firm Elliptic, in October 2023, claimed that the looted assets had been laundered through cross-chain crimes in collaboration with Russian nexus intermediaries in an attempt to obscure the trail.

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