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New Zealand police recover $90 million from BTC-e founder’s bank account

Alexander Vinnik is currently awaiting trial in France and is likely to face additional US charges 

As part of the next step in the country’s largest money-laundering bust, the New Zealand police have seized NZ$140 million (approximately $90.8 million USD) from the bank accounts under the control of Alexander Vinnik and his company, the Canton Business Corporation.

Vinnik previously operated BTC-e, the infamous cryptocurrency exchange. Multiple international agencies have opened investigations against the company for the lack of anti-money laundering (AML) controls and policies.

He has been suspected of leading a criminal organisation that, according to a police statement, “owns, operates, and manages one of the world’s leading e-crime websites” since 2011.

It is alleged that BTC-e had encouraged a conducive environment on its platform for criminals to exchange cryptocurrency for fiat currency, effectively laundering the funds they obtained from a wide range of criminal activities. This includes computer hacking, ransomware attacks, theft, fraud, corruption and drug crime. Authorities believe that at least $4 billion worth of bitcoins had been traded on the exchange.

This massive bust, orchestrated by the New Zealand police, was part of a global investigation against the long-suspected exchange.

Andrew Coster, the New Zealand Police Commissioner, said in a press statement that the “New Zealand Police has worked closely with the Internal Revenue Service of the United States to address this very serious offending.”

“These funds are likely to reflect the profit gained from the victimization of thousands, if not hundreds of thousands, of people globally as a result of cyber-crime and organized crime.” Coster continued.

Vinnik was first arrested in Greece last July 2017, under an extradition warrant from the US. However, due to a tussle between multiple jurisdictions over his custody, he ended up in France last December.

He will most likely be facing a trial in France for money laundering and extortion offences, as well as further charges in the US. Vinnik is looking at a maximum jail term of 55 years if found guilty.

The United States indictment revealed Vinnik’s company, BTC-e, was registered in the Seychelles Islands and had web domains registered to shell companies across multiple jurisdictions.

The funds that were obtained in New Zealand were recovered under the country’s Criminal Proceeds Recovery Act, with a High Court to decide on what will happen after.

“The global criminal community needs to understand New Zealand’s financial system, and companies established here, are not the places to try to hide illicit income,” Coster said.

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