A Russian man was charged with overseeing a black market Bitcoin exchange that helped launder billions of dollars and stood at the nexus of several criminal enterprises, The New York Times reported today. The indictment, which was unsealed in California on Wednesday, gave a long list of illegal activities that the Bitcoin exchange (BTC-E) facilitated, including ransomware fraud, identity theft, drug trafficking and public corruption. Alexander Vinnik was arrested in Greece; he had “directed and supervised” BTC-E’s operations and is said to have had co-conspirators. Justice Department officials said that the exchange appeared to have been responsible for laundering more than $4 billion for criminals, with most of the money turned into American dollars and Russian rubles. The site served 700,000 customers around the world, the officials said. The indictment may offer an explanation for a shock to the digital coin market in 2014. Vinnik and his partners are accused of stealing funds from the Tokyo-based Bitcoin exchange Mt. Gox, which declared bankruptcy in 2014 after disclosing a hacker intrusion. Mt. Gox’s chief executive, Mark Karpeles, said that year that it had lost more than 800,000 Bitcoins, some of which the company later said it had recovered. The indictment said that hundreds of thousands of Bitcoins moved from Mt. Gox into accounts at BTC-E that were directly controlled by Vinnik.
