Victims of the BTC-e Seizure

One of the most complex issues for civil asset forfeiture attorneys is protecting victims after their cryptocurrency is seized for forfeiture by the Government. Those victims sometimes have a choice between:

• filing a petition for remission or mitigation, which allows the seizing agency to decide what happens to their property; or
• filing a judicial claim and answer so the issues can be litigated in court with the right to a jury trial.

The BTC-e is an interesting case study that illustrates how complicated this process can become, especially with such a large amount of cryptocurrencies at stake. Victims are asking: “How do I get my cryptocurrency back from my BTC-e account seized by the government?”

On June 30, 2025, in Case Number 1:25-cv-02085, Assistant United States Attorneys (AUSAs) filed a complaint for forfeiture regarding “all virtual currency held in the BTC-E operating wallets as of July 25, 2017, and other assets further described herein.” The complaint was filed in the United States District Court for the District of Columbia.

Victims who lost money in BTC-e accounts can now file a judicial claim to participate as Claimants in the lawsuit, allowing the court to determine how the assets are distributed among the victims. The Government has a copy of the BTC-e server as it existed on the date of seizure on July 25, 2017, which can be searched by username, password, or the email address used to set up the account. The Government also maintains a searchable database that shows all transactions in those accounts leading up to the seizure of BTC-e.

The Government is expected to strongly encourage victims to file a petition for remission or mitigation. With petitions, the innocent owner leaves it up to the Government’s lawyers to determine whether any funds will be released to a particular innocent owner and whether the loss amount will be valued at the time of the seizure or its current value. Many expect those who file petitions to receive, at best, a check for the original value of the asset when it was seized, rather than its current value. The victims might also receive a percentage of that amount on a pro rata basis based on the number of known and unknown victims.

On the other hand, by filing a judicial claim and litigating the issues in court, the Claimant might have a better chance of obtaining the current value of the seized asset. Filing a claim might also be the best option because the victim may not know exactly what was in the account at the moment of seizure or how to prove it. By entering the lawsuit as a Claimant, the victim’s attorney can request information regarding the victim’s account and its contents.

When innocent account holders are affected by the seizure of cryptocurrency for forfeiture, civil asset forfeiture attorneys can represent their interests. The Government often takes a hide-the-ball approach, encouraging victims to waive their right to court action in favor of filing petitions for remission or mitigation. The biggest problem with filing a petition is that the Government might deny claims for any number of reasons, including an allegation that the account holder failed to provide sufficient information, lacked standing, or was a criminal using the account to conceal criminal proceeds.

What Does the Newly Filed Forfeiture Complaint Allege?

The first claim of the forfeiture complaint alleges the seized property is subject to forfeiture under 18 U.S.C. § 981(a)(1)(A) because it was involved in transactions in violation of 18 U.S.C. § 1960 (operating an unlicensed money transmitting business) or is traceable to such property.

The second claim of the forfeiture complaint alleges the seized property is subject to forfeiture under 18 U.S.C. § 981(a)(1)(A) because it was involved in a transaction in violation of 18 U.S.C. § 1956(h) (money laundering conspiracy) or is traceable to such property.

The complaint in Case Number 1:25-cv-02085 was filed by lawyers with the Money Laundering & Asset Recovery Section of the Criminal Division of the United States Department of Justice (DOJ) and trial attorneys with the Computer Crime and Intellectual Property Section in Washington, DC.

What Cryptocurrency was Seized from BTC-e by the U.S. Government?

The complaint lists various groups of assets that were seized, including:

• (A) All virtual currency held in the BTC-e operating wallets as of July 25, 2017, including but not limited to:
  • (i) Approximately 925.93922019 bitcoin seized between August 2, 2017, and August 17, 2017;
  • (ii) Approximately 4036.91817168321 ether seized on August 5, 2017;
  • (iii) Approximately 2249.25 litecoin seized between August 7, 2017 and August 11, 2017;
  • (iv) Approximately 284553.52143074 namecoin seized on August 10, 2017;
  • (v) Approximately 1946.609 novacoin seized on August 7, 2017;
  • (vi) Approximately 279.05 peercoin seized on August 11, 2017;
  • (vii) Approximately 33.03682558 dash seized between August 7, 2017 and August 11, 2017;
  • (viii) Approximately 929.5 BTC transferred to 1FFs5hv6JBScJq63aFZvBaNsP6FwnhVgre on or about July 31, 2017;
  • (ix) Approximately 485,705.4599 ETH held in 0x8eb3fa7907ad2Ef4c7E3BA4B1d2F2aAc6f4B5ae6 as of July 30, 2017.
• (B) Approximately USD $89,683,590.51, AUD $ 5,471,132.02, RUB 9,339,457.71, and GBP 35,459.32 in funds consolidated and previously held in the name of or for the benefit of Canton Business Corporation at FXOpen and/or XP Solutions Limited, account number X60FXPNXXF9776910001, and related trading accounts, including any interest earned thereon;
• (C) Approximately USD $72,574.48 and RUB 453,361.66 in funds consolidated and previously held in the name of Alexander Vinnik at FXOpen and/or XP Solutions Limited, account number XX20FXPNXXF3396510002, and related trading accounts, including any interest earned thereon;
• (D) Approximately USD $5,491.509.67 in funds consolidated and previously held in the name of or for the benefit of Canton Business Corporation and/or Stanislav Golovanov at FXOpen AU Pty Ltd., account number XX46FXPNXXG3750310001, and related trading accounts, including any interest earned thereon;
• (E) All funds on deposit in account numbers
  • (i) CZ6903000000000273635458,
  • (ii) CZ6703000000000273635300, and
  • (iii) CZ7803000000000273636266, held in the name of NANO ABC LP at Československá obchodní banka.
• (F) All funds on deposit in account number CZ0080000000000001939292223 held in the name of NANO ABC LP at Česká spořitelna banka. 

Background Information on BTC-e

BTC-e was an unlicensed cryptocurrency exchange that was shut down by U.S. law enforcement in 2017, based on allegations that the accounts were used by criminals to launder money from 2011 to 2017. Of course, not all account owners were guilty of wrongdoing. On BTC-e, users were allowed to buy, sell, and store bitcoin and other digital currencies anonymously.

The Government might allege that the victims who lost their assets were cybercriminals who transferred, laundered, and stored the proceeds of their illegal activities. The complaint alleges that BTC-e allowed users to set up and fund accounts anonymously, thereby attracting a significant clientele of criminals. The Government has alleged that BTC-e received criminal proceeds involving:

• computer intrusions
• hacking incidents
• ransomware events
• identity theft schemes
• corrupt public officials
• Darknet narcotics distribution rings

BTC-e held numerous cryptocurrency wallets and financial accounts opened in the name of shell and front companies worldwide, which were used to move funds on behalf of its clients without detection. From 2011 to 2017, BTC-e served over one million users worldwide, processing more than $9 billion worth of transactions.

Why was BTC-e Seized?

Money transmitters doing business in the United States have numerous obligations under U.S. laws designed to prevent money laundering by safeguarding the financial system. Outside the United States, other jurisdictions had similar laws. The Government alleged that BTC-e failed to comply with these laws, despite doing business in the United States by offering services to a U.S. client base and using U.S.-located servers.

The Government alleged BTC-e broke federal law by:

• not registering as a “money services business” with the United States Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”);
• having no meaningful anti-money laundering and/or “Know-Your-Customer” (“KYC”) processes in place;
• knowingly helping criminal enterprises conceal criminal proceeds by making it more difficult for law enforcement to trace and attribute funds.

Problems for Claimants Who Lost Cryptocurrencies on BTC-e

The Government’s complaint for forfeiture, filed on June 30, 2025, in Case 1:25-cv-02085, outlines the theory why many Claimants will not be entitled to any refund at all. The complaint alleges:

• BTC-e was utilized by cybercriminals worldwide and was one of the principal entities used to launder and liquidate criminal proceeds;
• sizable amounts of BTC-e’s business were derived from criminal activity as determined by the analysis of data housed on BTC-e’s servers, the Bitcoin blockchain, communications, and financial account records;
• BTC-e processed transactions involving the proceeds of specified unlawful activity, including:
  • “a. operation of an unlicensed money transmitting business, in violation of 18 U.S.C. § 1960;
  • b. computer hacking and intrusions, in violation of 18 U.S.C. § 1030;
  • c. identity theft, in violation of 18 U.S.C. § 1028;
  • d. interstate transportation of stolen property, in violation of 18 U.S.C. § 2314;
  • e. theft of government proceeds and extortion, in violation of 18 U.S.C. §§ 641 and 1951; and
  • f. narcotics trafficking, in violation of 21 U.S.C. § 841.

The complaint alleges “BTC-e received and transferred cryptocurrency valued at at least $68.3 million from darknet marketplaces; at least $14.0 million from fraud shops; at least $10.3 million from ransomware perpetrators; at least $20.0 million from virtual currency mixers; and at least $8.25 million from the hack of Mt. Gox.”

What Happened to Alexander Vinnik?

The complaint alleges that Alexander Vinnik, a Russian national, was one of the primary operators of BTC-e. Alexander Vinnik was indicted in the Northern District of California in May 2016. A superseding indictment was filed against him in the same district in January 2017. The caption of the case read: United States v. BTC-e et al., No. 3:16-cr-00227-SI, ECF Nos. 1, 6 (N.D. Cal.).

On May 3, 2024, Alexander Vinnik pled guilty in the U.S. District Court for the Northern District of California to money laundering conspiracy in violation of 18 U.S.C. § 1956(h) for his role in operating BTC-e. Under the plea agreement, Alexander Vinnik admitted that “BTC-e was one of the primary ways by which cyber criminals around the world transferred, laundered, and stored the criminal proceeds of their illegal activities. BTC-e received criminal proceeds of numerous computer intrusions and hacking incidents, ransomware attacks, identity theft schemes, corrupt public officials, and narcotics distribution rings.”

On February 11, 2025, the criminal case against Alexander Vinnik, was dismissed before sentencing. prior to a sentence being imposed. 105. The dismissal was not a result of any evidentiary infirmity.

USAO OFFICIAL NOTIFICATION POSTED ON JULY 07, 2025

You can find the USAO official notification posted on the forfeiture.gov website on July 7, 2025, which provides:

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA COURT CASE NUMBER: 25-CV-2085;  NOTICE OF FORFEITURE ACTION

Pursuant to 18 U.S.C. § 981, the United States filed a verified Complaint for Forfeiture against the following property:

All virtual currency held in the BTC-e operating wallets as of July 25, 2017, including but not limited to:

(i) Approximately 925.93922019 bitcoin seized from BTC-e between August 2, 2017, and August 17, 2017;

(ii) Approximately 4036.91817168321 ether seized from BTC-e on August 5, 2017;

(iii) Approximately 2249.25 litecoin seized from BTC-e between August 7, 2017 and August 11, 2017;

(iv) Approximately 284553.52143074 namecoin seized from BTC-e on August 10, 2017;

(v) Approximately 1946.609 novacoin seized from BTC-e on August 7, 2017;

(vi) Approximately 279.05 peercoin seized from BTC-e on August 11, 2017;

(vii) Approximately 33.03682558 dash seized from BTC-e between August 7, 2017 and August 11, 2017;

(viii) Approximately 929.5 BTC transferred to 1FFs5hv6JBScJq63aFZvBaNsP6FwnhVgre on or about July 31, 2017;

(ix) Approximately 485,705.4599 ETH held in x8eb3fa7907ad2Ef4c7E3BA4B1d2F2aAc6f4B5ae6 as of July 30, 2017 (18-FBI-002785)

Approximately USD $89,683,590.51, AUD $ 5,471,132.02, RUB 9,339,457.71, and GBP 35,459.32 in funds consolidated and previously held in the name of or for the benefit of Canton Business Corporation at FXOpen and/or XP Solutions Limited, account number X60FXPNXXF9776910001, and related trading accounts, including any interest earned thereon. (18-FBI-002786)

Approximately USD $72,574.48 and RUB 453,361.66 in funds consolidated and previously held in the name of Alexander Vinnik at FXOpen and/or XP Solutions Limited, account number XX20FXPNXXF3396510002, and related trading accounts, including any interest earned thereon. (18-FBI-002787)

Approximately USD $72,574.48 and RUB 453,361.66 in funds consolidated and previously held in the name of Alexander Vinnik at FXOpen and/or XP Solutions Limited, account number XX20FXPNXXF3396510002, and related trading accounts, including any interest earned thereon. (18-FBI-002789)

Approximately USD $5,491.509.67 in funds consolidated and previously held in the name of or for the benefit of Canton Business Corporation and/or Stanislav Golovanov at FXOpen AU Pty Ltd., account number XX46FXPNXXG3750310001, and related trading accounts, including any interest earned thereon. USAO OFFICIAL NOTIFICATION POSTED ON JULY 07, 2025 (18-FBI-002790)

All funds on deposit in account numbers (i) CZ6903000000000273635458 (ii) CZ6703000000000273635300, and (iii) CZ7803000000000273636266, held in the name of NANO ABC Ceskoslovenska obchodni banka. (18-FBI-002791)

All funds on deposit in account number CZ0080000000000001939292223 held in the name of NANO ABC LP at Ceska sporitelna banka. (18-FBI-002792)

Any person claiming a legal interest in the Defendant Property must file a verified Claim with the court within 60 days from the first day of publication (July 04, 2025) of this Notice on this official government internet web site and an Answer to the complaint or motion under Rule 12 of the Federal Rules of Civil Procedure within 21 days thereafter.

18 U.S.C. § 983(h)(1) permits a court to impose a civil fine on anyone asserting an interest in property which the court determines was frivolous.

The verified Claim and Answer must be filed with the Clerk of the Court, 333 Constitution Avenue, NW, Room 1225, Washington, DC 20001, and copies of each served upon Trial Attorney Joshua Sohn, 1400 New York Avenue, NW, Suite 10100, Washington, DC 20530, or default and forfeiture will be ordered. See, 18 U.S.C. § 983(a)(4)(A) and Rule G(5) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions.

The government may also consider granting petitions for remission or mitigation, which pardon all or part of the property from the forfeiture. A petition must include a description of your interest in the property supported by documentation; include any facts you believe justify the return of the property; and be signed under oath, subject to the penalty of perjury, or meet the requirements of an unsworn statement under penalty of perjury. See 28 U.S.C. Section 1746.

For the regulations pertaining to remission or mitigation of the forfeiture, see 28 C.F.R. Sections 9.1 – 9.9. The criteria for remission of the forfeiture are found at 28 C.F.R. Section 9.5(a). The criteria for mitigation of the forfeiture are found at 28 C.F.R. Section 9.5(b). The petition need not be made in any particular form and may be filed online or in writing. You should file a petition not later than 11:59 PM EST 30 days after the date of final publication of this notice. See 28 C.F.R. Section 9.3(a). The https://www.forfeiture.gov/FilingPetition.htm website provides access to a standard petition form that may be mailed and the link to file a petition online. If you cannot find the desired assets online, you must file your petition in writing by sending it to Trial Attorney Joshua Sohn, 1400 New York Avenue, NW, Suite 10100, Washington, DC 20530. This website provides answers to frequently asked questions (FAQs) about filing a petition.

You may file both a verified claim with the court and a petition for remission or mitigation.

This article was last updated on Monday, July 7, 2025.