Belarusian National Linked to BTC-e Faces 25 Years for $4 Billion Crypto Money Laundering
6.2.24  Cryptocurrency  The Hacker News

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

Aliaksandr Klimenka, who was arrested in Latvia on December 21, 2023, was extradited to the U.S. and is currently being held in custody. If convicted, he faces a maximum penalty of 25 years in prison.

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

The exchange is alleged to have received deposits valued at over $4 billion, with Vinnik laundering 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 in bitcoin with high levels of anonymity, thereby building a customer base that engaged in criminal activity.

This included hacking incidents, 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 effectuated their scheme," the U.S. Department of Justice (DoJ) said.

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

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

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

News of Klimenka's indictment comes as the DoJ charged Noah Michael Urban, 19, of Palm Coast, Florida, with wire fraud and aggravated identity theft for offenses that led to the theft of $800,000 from at least five different victims between August 2022 and March 2023.

Urban, who went 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 "top member" of a broader cybercrime ecosystem that calls itself The Com.

It also follows the Justice Department's announcement of charges against three individuals, Robert Powell, Carter Rohn, and Emily Hernandez, in relation to a SIM swapping attack aimed at crypto exchange FTX to steal more than $400 million at the time of its collapse in 2022.

Powell (aka R, R$, and ElSwapo1), Rohn (aka Carti and Punslayer), and Hernandez (aka Em) are accused of running a massive cybercriminal theft ring dubbed 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, said the plunder assets had been laundered through cross-chain crime in collaboration with Russia-nexus intermediaries in an attempt to obscure the trail.