The case of the BTC-e cryptocurrency exchange: the owner of "Soft-FX Services" Klimenko, extradited from Latvia, will continue to be tried in June

The US Department of Justice announced that the co-founder of the BTC-e cryptocurrency exchange, Russian Alexander Vinnik, who is accused of laundering billions of dollars, entered into a plea deal and admitted guilt.

This allowed the Russian to eliminate the risk of a prison sentence of over a hundred years.

“The culmination of the negotiations was a deal with the prosecutor’s office; we expect that the prison term will be up to 10 years,” said Vinnik’s lawyer Arkady Bukh.

From 2011 to 2017, when the service was shut down by law enforcement, the crypto exchange processed more than $9 billion in transactions and served more than a million users worldwide, including numerous customers in the United States.

“BTC-e was one of the primary ways in which cybercriminals around the world transferred, laundered, and stored the criminal proceeds of their illegal activities,” the U.S. Department of Justice said in a May 3 press release.

On June 7, in the United States, a citizen of the Republic of Belarus and Cyprus, Alexander Klimenko, who is accused of international money laundering conspiracy and participation in the operation of an unlicensed digital currency exchange, will continue to be tried in the same case.

Alexander Klimenko was detained in Latvia on December 21, 2023 at the request of American authorities. After which he was extradited to the United States and arrested.

The Department of Justice and the United States Secret Service published a release, according to investigators, since 2011, Alexander Klimenko, together with Russian citizen Alexander Vinnik, controlled the largest crypto exchange BTC-e, which collapsed in 2017.

Klimenko, according to investigators, managed the financial company FX Open and the company Soft-FX responsible for the technical part. It was this group of legal entities that was the final recipient of the money coming to it through offshore companies from BTC-e, it follows from the documents.

BTC-e allowed cryptocurrencies to be traded with a “high level of anonymity” and “developed a client base heavily dependent on criminal activity,” and the exchange and its team’s income was generated by laundering funds from “identity theft schemes, hacking incidents, corrupt government officials, scammers , drug trafficking,” law enforcement agencies are convinced.

BTC-e servers, located in the United States, were a key tool for carrying out criminal activities and, according to investigators, were supported by Klimenko and his company Soft-FX.

Klimenko, as the American justice believes, conducted “extensive business” in the United States, without registering the BTC-e exchange as a payment system with the US Department of the Treasury, and also bypassed anti-money laundering rules and “know your customer” (KYC) requirements ) provided for by federal legislation.

According to sources, Alexander Klimenko managed the crypto assets of the President of the Republic of Belarus Alexander Lukashenko and was in close contact with his eldest son Viktor.

According to the Land Register, in 2010 Alexander Klimenko purchased an apartment in Jurmala (29. līnija 1) for 105,420 lats (more than 200 thousand dollars).

He bought this property (320.9 m²) from Maxim Esterkin (MAKSIMS ESTERKINS), son of Leonid Esterkin, co-owner of Rietuma Banka. According to the source, in 2010 Klimenko registered the company SOFT-FX in Latvia. But a year later he closed the enterprise.

SOFT-FX had two founders: Manzuria Investment Inc. (Siute 102, Ground Floor, Blake Building, Cirner Eyre and Hutson street, Beliza) and SFX Investments Inc. (60 Market Square, PO box 364, Beliza)

At the moment, Alexander Klimenko solely owns the Latvian company Soft-FX Services. In 2023, the turnover of the company, which had 25 employees, amounted to 1,953,100 euros

The Register of Enterprises states that Soft-FX Services carries out “other activities in the field of information technology and computer systems.” Legal address of the company with an authorized capital of 5 thousand euros: Skolas 24, Riga.