How not to Launder $4 Billion worth of bitcoin

I woke up to find one of my exchanges (BTC-e) frozen.

Fuck.

So you robbed an exchange, now what?

How do you move all that stolen internet money so you can buy that yacht you always wanted? Buying things requires a shipping address and leaves a record on the blockchain. Selling bitcoin in person for cash is hard to move high volumes.

If your name is Alexander Vinnik, you open a bitcoin exchange.

Users will transfer you money for the stolen coins which will get mixed in with the legit coins. From outside the exchange bitcoin moves in and out, but no one knows what goes on off the blockchain. The record of transactions only exists in the exchange’s internal ledger.

Anonymity and liquidity achieved!

All you need is a cool name like BTC-e, sounds perfect! right?

Except, it’s not. As Russian national Alexander Vinnik discovered when he was taken into custody.

Now you might be asking yourself how did Vinnik come into the possession of so much…