US Arrests Key Figure Behind Defunct BTC-e Exchange In Latvia On Money Laundering Charges Totaling $4B

Aliaksandr Klimenka, a central figure in the dismantled BTC-e cryptocurrency exchange, has been apprehended and indicted by U.S. authorities for his supposed role in several illegal activities.

What Happened: The Department of Justice (DOJ) has detained and charged Belarusian-Latvian entrepreneur Klimenka with numerous counts of money laundering and other felonies, reported CoinDesk. Klimenka is accused of laundering over $4 billion in funds originating from criminal activities, including ransomware attacks, identity theft, and drug trafficking rings from 2011 to 2017.

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Despite neglecting to register his exchange as a money service with the U.S. Department of Treasury, Klimenka continued to conduct extensive business within the U.S.. He consistently avoided federal anti-money laundering laws and ‘know your customer’ safeguards. Arrested last December in Latvia at the behest of U.S. authorities, Klimenka is currently in federal custody in California. If found guilty of all charges, he could face up to 25 years in prison.

Why It Matters: The arrest of Klimenka is the latest step in a broader crackdown on illegal activities related to cryptocurrencies, such as Bitcoin BTC/USD, Ethereum ETH/USD, Dogecoin DOGE/USD and others. In December, Sen. Elizabeth Warren‘s (D-Mass.) push for the Digital Asset Anti-Money Laundering Act gained momentum with growing Senate support to address the use of cryptocurrencies in illicit activities such as money laundering and drug trafficking.

Taiwan also took substantial steps to curb crypto-related money laundering with a new bill, following a record case involving the laundering of $320 million through digital assets. Moreover, Blockfence, a blockchain security firm, recently exposed a complex scam method that defrauded over 42,000 victims of more than $32 million since April. These instances underline the pressing need for stringent regulations in the cryptocurrency sector.

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