The US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) assessed a civil monetary penalty of $110,003,314 against Canton Business Corporation (BTC-e) as well as a $12,000,000 penalty against Alexander Vinnik on July 26, 2017. BTC-e is one of the largest virtual currency exchanges by volume in the world and Vinnik is a Russian national who allegedly controlled, directed, and supervised the company’s operations, finances, and accounts. In addition to the FinCEN assessments, a 21-count criminal indictment against BTC-e and Vinnick was unsealed and Vinnick was arrested in Greece.
This supervisory action is the second FinCEN has taken against a virtual currency exchanger, and the first against a foreign entity operating as a money services business (MSB) with activities in the United States. The action also imposes the second highest civil monetary penalty to ever be assessed against an MSB. FinCEN has increasingly brought enforcement actions against MSBs and other non-traditional financial institutions, and these actions seem likely to continue.