BTC-e received a $110M penalty from US authorities

Financial Crimes Enforcement Network imposed a  $110M penalty on the BTC-e "for willfully violating U.S. anti-money laundering (AML) laws"
27 July 2017   2077

The Office worked in coordination with the US Attorney's Office of the Northern District of California. According to the official documents of FinCEN, Russian citizen Alexander Vinnik and the BTC-e exchange he represents are accused of money laundering, conspiracy to commit financial crimes, illegal financial transactions and the management of a business related to money transfers. At the same Vinnik FinCEN imposed a fine of $ 12 million for his "role in violations." This is reported on the FinCEN website.

We will hold accountable foreign-located money transmitters, including virtual currency exchangers, that do business in the United States when they willfully violate U.S. anti-money laundering laws. This action should be a strong deterrent to anyone who thinks that they can facilitate ransomware, dark net drug sales, or conduct other illicit activity using encrypted virtual currency.  Treasury’s FinCEN team and our law enforcement partners will work with foreign counterparts across the globe to appropriately oversee virtual currency exchangers and administrators who attempt to subvert U.S. law and avoid complying with U.S. AML safeguards.
 

Jamal El-Hindi
Acting Director, FinCEN

The agency also notes that the users of the exchange were actively giving advises to the BTC-e administration on the conduct of illegal money transactions and laundering proceeds. Laudering money was from the Darkkroad, Hansa and AlphaBay, well-known deep web drug markets. Also FinCEN noted that for the opening of the trading account on the BTC-e exchange only the email address, password and user name were required.

In addition, BTC-e is involved in part of the funds that were lost after the bankruptcy of Bitcoin exchange Mt. Gox. In particular, the FinCEN website says that for the period from 2011 to 2014 BTC-e carried out about 300,000 bitcoins-transactions with illegally obtained funds.

FinCEN also found that the exchange had received funds worth about $ 3 million, which were received as a result of the work of extortion programs, such as "Cryptolocker" and "Locky". Also BTC-e is involved in money laundering through the Liberty Reserve payment system, which was closed by the US authorities in 2013.

Alexander Vinnik was arrested 25th of July in Greece. BTC-e is unavailable from 25th too. Official reason is maintenance.

Bear Market to Hit Mining Hard

BitMEX research division presented an analysis of the impact of market decline on the mining industry
11 December 2018   75

The cryptocurrency market has experienced a marked decline over the past weeks. The BitMEX research division presented an analysis of the impact of these events on the mining industry. Bitcoin hash rate has fallen by 31% since the beginning of November, which is equivalent to the capacity of 1.3 million Bitmain S9 devices. From this, BitMEX concludes that miners as a class are in a difficult situation, however, they may have different conditions, and those who pay more for electricity, are forced to turn off their equipment first, while others may still be quite viable.

The decrease in the price of Bitcoin by 45% since the beginning of November has already caused two recalculations of the complexity of mining to the lower side - by 7.4% and 15.1% on November 16 and December 3, respectively. The first recalculation turned out to be the largest since January 2013, the second - since October 2011.

Bitcoin mining revenue fell from $ 13 million per day in early November to $ 6 million per day in early December. The fall in the size of the miner's encouragement turned out to be even more rapid than the fall in the price of cryptocurrency. This is due to the delay in recalculating the complexity of mining. For the six-day period ending December 3, 21.8% fewer blocks were mined than expected, since the miners left the network before recalculating the difficulty. As a result, in addition to reducing the size of the miners' encouragement in dollar terms, due to lower asset prices, they received 21.8% less bitcoin awards.

One of the popular reasons for the recent decline in the cryptocurrency market is that miners sold bitcoins to cover their costs of hash warsin the Bitcoin Cash network. The monitoring platform Boltzmann recorded an unusually large sale of Bitcoin by the miner on November 12, that is, 3 days before the hard fork of Bitcoin Cash.

BitMEX assumes that the actions of miners over the past weeks could have played a significant role in reducing the market, however, recommends not overestimating their value and reminds that in a bearish trend, prices continue to fall regardless of asset movements and news.