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Google Settles With DOJ Over Lost Criminal Crypto Exchange Data

27 Oct, 20222 min readDeFi
Google Settles With DOJ Over Lost Criminal Crypto Exchange Data

Google today agreed to improve its legal compliance program after losing data related to BTC-e, a criminal crypto exchange investigated and shut down by the FBI for alleged money laundering in 2017.

The tech giant will “ensure timely and complete responses to legal process such as subpoenas and search warrants,” going forwards, according to a news release from the Department of Justice on Wednesday.

The department served a search warrant on Google in 2016, demanding the company turn over data the company held concerning BTC-e.

However, Google leaned on a standing legal precedent that limited such requests to data stored on American soil. Due to Google’s optimization algorithms, which moved data around the world, the company couldn’t clearly define which information it was required to forfeit.

Congress eventually intervened by passing the CLOUD act, which required all related data in cases like Google’s be handed over, regardless of where it was stored. Google even signed a letter in 2018 praising the act’s passage for clarifying the firm’s obligations. However, the data originally sought by the Justice Department had already been lost.

Today, the firm said it is taking numerous measures to ensure such legal complications never happen again.“In the filed stipulation, Google represented to the court that it spent over $90 million on additional resources, systems, and staffing to implement legal process compliance program improvements,” said the DOJ.BTC-e operated in the United States from 2011 to 2017, handling an estimated $9 billion in Bitcoin transactions during that time. According to the Justice Department, its operators allowed users—many of which were criminals—to trade Bitcoin anonymously and launder money.

BTC-e cofounder Alexei Bilyuchenko went on to establish another exchange called WEX, which subsequently failed in 2018. In 2020, New Zealand Police froze $90 million in funds connected to Bilyuchenko’s partner, Alexander Vinnik. The police accused him of personally laundering roughly $4 billion worth of Bitcoin, and had “no anti-money laundering controls and policies,” in place at BTC-e.

Two months ago, the Department announced that Vinnik had been extradited from Greece to the United States.

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