BTC-e, a digital currency exchange, and Alexander Vinnik, who purportedly directed and supervised BTC-e’s finances and operations, were criminally indicted by a federal grand jury in San Francisco for operating an unlicensed money service business, money laundering and other crimes. According to court papers filed by the US Attorneys’ Office, from 2011 through the present, BTC-e “was an exchange for cybercriminals worldwide,” and allegedly used by criminals to launder and liquidate criminal proceeds from digital currencies, such as Bitcoin, to fiat currencies, including US dollars and EU Euros. Moreover, despite doing “substantial” business in the US, BTC-e did not register with the Financial Crimes Enforcement Network of the US Department of Treasury, as required, and had no “meaningful” anti-money laundering procedures in place, claimed the indictment. According to the indictment, BTC-e, through the relevant time, received criminal proceeds from numerous computer hacking events and ransomware scams, including the well-publicized hacking of the digital currency online market Mt. Gox in June 2011. Among other things, said the indictment, BTC-e users were not required to provide any meaningful identifying information to conduct transactions on the exchange. Mr. Vinnik was arrested in Greece on July 25 in connection with his indictment. If convicted, Mr. Vinnik could be subject to a substantial time of imprisonment and fines. Separately, FinCEN assessed a monetary penalty of over US $110 million against BTC-e and US $12 million against Mr. Vinnik for not registering BTC-e as a money service business and violating AML program requirements.