Cryptocurrency exchanges BTC-e also known as Canton Business Corporation is facing a $100 million civil lawsuit filed by the Department of Justice (DOJ) in the Northern District of California.
The DOJ also named Alexander Binnik, one of the chief owners and operators of BTC-e, as defendant in the complaint. Binnik is a Russian national. He controlled multiple BTC-e administrative accounts, helped direct and supervise the operations of the cryptocurrency exchange.
BTC-e has operations in Bulgaria, the Seychelles Islands, the Northern District of California and other jurisdictions. The cryptocurrency exchange allows its users to anonymously buy and sell bitcoin and other digital currencies.
BTC-e and Binnik allegedly violated the Bank Secrecy Act
In its complaint, the DOJ accused BTC-e and Binnik of violating the Bank Secrecy Act (BSA) by failing to register as a Money Services Business (MSB) with the The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN)
In addition, the defendants allegedly failed to establish anti-money laundering programs and procedures. Under the BSA, a MSB is required must develop, implement, and maintain an effective anti-money laundering (AML) program to prevent terrorist activities.
Furthermore, the Justice Deparment alleged that BTC-e failed to file a suspicious activity reports (SARs). Instead, it received proceeds from ransomware schemes, transferred funds to and from known dark net marketplaces. It also deposited funds stolen from other digital currency exchanges such as Mt. Gox into BTC-e accounts controlled by Binnik.
The Justice Department is seeking the extradition of Binnik to the United States from Greece, where he is currently incarcerated.
FinCEN determined that the defendants willfully violated the BSA. It is seeking $12 million in penalties against Binnik and $88,596,314 in penalties against BTC-e.