After going offline for unscheduled maintenance just days ago, a man linked to operating crypto currency exchange site BTC-e.com, 38-year-old Alexander Vinnik, was arrested in Greece and is being charged with 17 counts of money laundering in addition to two counts of engaging in unlawful monetary transactions.
It is not clear exactly what Vinnik's role was within what was once the largest exchange platform for digital currencies due to the secrecy and lack of disclosures made about who actually was behind the site. Currently, a holding company registered in London is listed as the official owner.
According to US officials, over $4 billion has been laundered through the site since it opened in 2011. In 2014, exchange site Mt Gox had assets stolen causing it to shut down permanently. Prosecutors have suggested that Vinnik may have been using BTC-e.com to launder funds stolen from Mt Gox by setting up user accounts on the site and then collecting the trade fees himself. Nearly 530,000 bitcoins from the Mt Gox hack were deposited to BTC-e, currently worth over $1.3 billion.
At this time, it is unknown whether the site's assets are still in place or whether legitimate users of the site will be out their money. No movement of the coins held within BTC-e's wallets has been confirmed. Even if the assets are still intact, US officials may choose to seize all assets if the site is proven to have been actively involved in money laundering. In the case that assets may be returned to their original owners, distributing them back to their rightful owners could prove to be a challenge since no personally identifiable information was collected or verified by BTC-e.
According to a translated tweet from BTC-e, the site will be back online with 5-10 days. However, it is unlikely for trading to resume until legalities have been settled.
Update2: At the moment, work is underway to restore the service. Approximate terms from 5 to 10 days. Thank you for understanding # btce
A $110 million fine has been placed by the Financial Crimes Enforcement Network against BTC-e. Meanwhile, Vinnik has been handed a $12 million fine. If convicted, Vinnik is eligible for up to 55 years in prison which would likely be the remainder of his lifetime.
This is just one more example of an ongoing crackdown on cyber crimes. AlphaBay and tech support scammers have also been targeted and taken down earlier this year in joint efforts by US agencies.