A few disparate thoughts regarding FinCEN's takedown of BTC-e:
- For critics, the criminal activity of one of the oldest and largest digital currency firms will serve as the prime example of the risks of cryptocurrency.
- BTC-e's operations fell well outside of the bounds of compliance negligence. The charges represent conscious decisions to engage in money laundering, cyber attacks, identity theft and narcotics distribution.
- This will likely and disproportionately affect other Bitcoin exchanges through regulatory and law enforcement scrutiny. Exchanges with gaps in their compliance programs may suffer greater penalties for less-egregious AML program failures.
- Exchanges with proactive compliance programs may be able to leverage their lowered risk as a competitive advantage. Digital currency users have a tangible stake in transacting on legitimate, compliant platforms.
On Wednesday, the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) announced a $110 million fine against BTC-e for facilitating crimes like drug sales and ransomware attacks along with a separate $12 million fine against its owner, Alexander Vinnik. BTC-e is headquartered in Russia and has long served as a forum where users can exchange traditional currencies for bitcoin or other digital monies like Ethereum or Dash.