$4 Billion Bitcoin Money Laundering Scheme Sees First Indictment by U.S. Jury

Controversy has swept the bitcoin community after a Russian man was indicted by a U.S. jury for using digital currency to launder more than $4 billion for criminal networks.

Russian “Mastermind” Apprehended

Alexander Vinnik – the alleged “mastermind” behind the money laundering scheme – was arrested in a small village in northern Greece on Tuesday following an investigation led by the U.S. Department of Justice. Just 24 hours later, the Russian national was indicted by a U.S. jury as being the operator of BTC-e, a bitcoin exchange used to launder money for drug traffickers and cyber criminals.

Reuters reports that the website Vinnik was running had “7 million bitcoins deposited, and 5.5 million bitcoins in withdrawals.”

Vinnik has been on the U.S. Ministry of Justice watch list since 2011. Authorities have also linked him to the failure of Mt. Gox, whose collapse in 2014 raised fears about the imminent demise of the cryptocurrency system.

Also Read: Alleged BTC-E Admin Arrested for Laundering $4 Billion in Bitcoin

Cyber Crime: Bitcoin’s Enduring Legacy

Although bitcoin’s image in the mainstream has improved over the past three years, some of its detractors view it as nothing more than a conduit for illegal activity, with money laundering being only one example. The federal take-down of Silk Road in 2013 highlighted the extent to which cryptocurrency was being used to evade the authorities.

In 2016, a high-profile breach of Hong Kong-based exchange Bitfinex also shone negative spotlight on the crpytocurrency market, raising concerns about a lack of insurance protocols.

Bitcoin Prices Stable

The indictment of Vinnik had little impact on the cryptocurrency market, with bitcoin prices trading around 2,675.00, according to Bitstamp. That represents a gain of 2%. Prices fluctuated between $2,550.00 and $2,601.00 during the Asian session.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi