Crypto intelligence company CipherTrace said it has started to see coronavirus-related frauds that require some form of digital currency payment.  File picture: Reuters/Dado Ruvic
Crypto intelligence company CipherTrace said it has started to see coronavirus-related frauds that require some form of digital currency payment. File picture: Reuters/Dado Ruvic

New Zealand freezes millions linked to embattled cryptocurrency trader BTC-e

By Rebekah Lyell Time of article published Jun 22, 2020

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New Zealand police have frozen 140 million New Zealand dollars (90 million dollars) in funds thought to be linked to a cryptocurrency firm whose owner has been accused of money laundering.

The money is linked to the Canton Business Corporation and its owner Alexander Vinnik, who was holding funds in a New Zealand company, Police Commissioner Andrew Coster said in a statement on Monday.

Canton and Vinnik previously operated cryptocurrency exchange BTC-e.

New Zealand police allege that US-based BTC-e had no anti-money laundering controls and policies, which allowed cyber criminals to launder proceeds from criminal activities.

"These funds are likely to reflect the profit gained from the victimization of thousands, if not hundreds of thousands, of people globally as a result of cyber-crime and organized crime," Coster said.

Vinnik was arrested on money laundering allegations in Greece in 2017 and has since been extradited to France where he remains in custody.

Coster said given the global nature of money laundering, there is always a risk that New Zealand companies will inadvertently become involved.

"However, this restraint demonstrates that New Zealand is not, and will not be, a safe haven for the illicit proceeds generated from crime in other parts of the world."

“The global criminal community need to understand New Zealand’s financial system, and companies established here, are not the places to try to hide illicit income,” says Commissioner Coster.

“This restraining order also demonstrates that New Zealand Police are actively conducting investigations with our international partners and that we have the expertise to investigate money laundering at the most serious level.

He said an investigation is ongoing, pending an application to the High Court seeking forfeiture of the funds.

The funds currently frozen mark the largest restraint of funds ever by New Zealand Police.

dpa

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