Cross-Border Crypto Prosecutions
Key Legal and Practical Issues in Cross‑Border Crypto Prosecutions
Before we get into cases, it helps to understand the challenges and legal tools commonly involved.
Jurisdiction
Crypto crimes often span multiple countries: the perpetrator, victims, servers, exchanges, and blockchain nodes might all be in different jurisdictions. Establishing which court(s) have authority (territorial, quasi‑territorial, extraterritorial) is often contested.
Extradition / Mutual Legal Assistance (MLA)
When the suspect is abroad, prosecutors need extradition treaties or MLATs (Mutual Legal Assistance Treaties) to gather evidence or bring the suspect to the prosecuting country. Differences in law (what counts as fraud, money laundering, possession of criminal property, etc.) complicate extradition and evidence sharing.
Evidence and collection
Blockchain records, wallet addresses, transaction flows are public (or semi‑public), but linking an address/wallet to a real person often requires cooperation from exchanges, identity services, etc., which may require legal compulsion and cross‑border cooperation.
Compliance with sanctions and money laundering laws
Many prosecutions involve violating sanctions (e.g. trading with or facilitating services for entities or individuals under sanctions), failure to maintain AML/KYC structure, unlicensed money transmission, etc.
Seizure, forfeiture, and asset recovery
Once illicit crypto or property is identified, the legal process for seizing, freezing, and repatriating assets or compensating victims involves complex civil/criminal law and often conflicts between countries.
Principles like the “Anwar” principle (UK)
In UK law, for example, under certain statutes (such as the Proceeds of Crime Act), the authorities need to show that property is “criminal property” (i.e. derived from some criminal conduct). Sometimes prosecutors rely on possession of criminal property even without fully establishing the underlying crime, if evidence or cooperation from the foreign jurisdiction is weak. (The “Anwar” case established that principle in UK law.)
Selected Case Studies
Here are several real cases that illustrate how these issues play out in practice. I describe facts, jurisdictional problems, outcomes, and legal reasoning.
Case 1: BTC‑e / Alexander Vinnik (USA)
Facts: BTC‑e was a Bitcoin exchange operating with minimal (or no) AML/KYC, facilitating transactions for users worldwide, including individuals involved in hacking, ransomware, fraud, etc. The U.S. prosecutors charged Alexander Vinnik (a Russian national) with operating the exchange, money laundering, etc. It’s alleged that BTC‑e handled billions of dollars in illicit cryptocurrency.
Jurisdictional aspects:
Vinnik was arrested in Greece, at the request of U.S. authorities. Extradition was used as the method to bring him to face charges in the U.S.
The U.S. asserted jurisdiction because BTC‑e processed transactions involving U.S. persons or with U.S. impact, plus because U.S. law (e.g. anti‑money laundering, unlicensed money service business laws) applied.
Legal Charges:
Operation of an unlicensed money services business
Conspiracy to commit money laundering
Multiple counts of money laundering related to transactions over many years.
Outcome:
Vinnik pled guilty (in 2024) to a money laundering conspiracy in respect of his role in operating BTC‑e.
Significance:
Demonstrates how U.S. can reach operators overseas when there is extraterritorial effect, cooperation via extradition, and sufficient ties to U.S. transactions.
Shows how crypto exchanges are held liable for facilitating illicit finance, even if not physically located in the prosecuting country.
Case 2: OneCoin Legal Officer (USA / International)
Facts: OneCoin was a large global fraudulent cryptocurrency scheme / pyramid scheme. Irina Dilkinska (former head of legal & compliance) was involved in laundering large sums (about $110 million) of fraudulent proceeds, routing money to entities in the Cayman Islands, etc. Other individuals involved in OneCoin have also been convicted or are being pursued
Jurisdictional aspects:
Although OneCoin was based in Bulgaria, many victims globally; U.S. prosecutors had jurisdiction over some activities (wire fraud, money laundering) that affected U.S. territory or financial systems.
Forfeiture provisions, international cooperation, and charges of violating U.S. laws even though some acts occurred abroad.
Legal Charges: Conspiracy to commit wire fraud, money laundering, etc. Dilkinska pled guilty. Reuters
Outcome: She was sentenced to four years in prison and ordered to forfeit over $111 million. Reuters
Significance: Shows that officers of a scheme, even if not the top founders, can be held criminally responsible in cross‑border fraud. Also, the scale of asset recovery (forfeiture) is large.
Case 3: Zhimin Qian (aka Yadi Zhang) – UK / China cross‑border crypto laundering
Facts: Between 2014‑2017, Qian allegedly operated a fraudulent investment scheme in China, defrauding about 128,000 people. After China banned crypto in 2017, she is alleged to have converted a large amount of fraud proceeds into Bitcoin, fled China, and stored/used crypto and moved crypto into UK connections. In 2018, devices in a London mansion stored ~61,000 bitcoins later seized. MEXC+4The Guardian+4AInvest+4
Jurisdictional aspects:
Though the fraud is alleged to have occurred in China, the UK is prosecuting Qian for possession and transfer of criminal property (i.e. the crypto), not for defrauding victims in China. This avoids needing to prove the fraud itself in detail under Chinese law in UK courts (which would be hard). This is legally permissible under UK’s Proceeds of Crime Act. This reflects the “Anwar principle” approach. AInvest+1
UK‑China cooperation over recovery of assets is an issue; China may want the funds returned; UK prosecuting authority wants to keep them. It’s a cross‑border clash of asset recovery laws. AInvest+1
Legal Charges:
Counts of acquiring, possessing and transferring criminal property (in crypto/Bitcoin). Not direct fraud charges in the UK (since fraud is alleged in China). AInvest+1
Outcome: The trial commenced in September 2025 in UK. Other persons, like Jian Wen, have already been convicted of money laundering in the UK for similar linkages. AInvest+2Financial Times+2
Significance:
Shows how a jurisdiction can prosecute possession/transfers of property derived from crime abroad, even if the core crime location (fraud, misrepresentation) is not within its territory.
Demonstrates legal use of asset seizure and civil asset recovery in cross‑border crypto cases.
This is one of the largest crypto seizures globally and will likely set precedent in UK law for handling such cross‑border cases.
Case 4: Evita Pay / Garantex executive (US / India / Russia / Finland / Germany)
Facts: Iurii Gugnin, CEO of Evita Pay, was charged by U.S. DOJ with laundering over $500 million to aid sanctioned Russian banks (VTB, Sberbank). The scheme allegedly involved using stablecoins (Tether, etc.), misrepresenting ties to Russia, acting through crypto exchanges, etc. Related to international sanctions evasion. Business Insider
Jurisdictional aspects:
U.S. claims jurisdiction due to sanctions laws (which can have extraterritorial reach), use of U.S. financial systems, or U.S. persons/entities.
Arrests and enforcement may involve multiple countries; operations across borders.
Legal Charges: Wire fraud, bank fraud, violating sanctions, operating an unlicensed money transmitting business, noncompliance with AML requirements. Business Insider
Outcome: As of reporting, charges are underway, potential decades of imprisonment. Assets to be seized. Business Insider
Significance:
Illustrates how sanctions enforcement is being used in crypto context.
Use of stablecoins and crypto exchanges in facilitating cross‑border illicit finance is under scrutiny.
That an individual can be charged in U.S. for acts involving entities abroad.
Case 5: Do Kwon (Terraform Labs) – Extradition & Fraud Charges
Facts: Do Kwon, founder of Terraform Labs, was arrested in Montenegro after the collapse of TerraUSD / Luna. There were fraud, securities, commodities, and money laundering charges relating to misrepresentations in how the Terra ecosystem worked. Different countries (U.S., South Korea) sought his extradition. Financial Times+1
Jurisdictional aspects:
Multiple jurisdictions claim interest (South Korea because he is Korean; U.S. because investors and markets are impacted, and perhaps misrepresentations in product offerings that may have tied into U.S. securities / commodities law).
Montenegro decided to extradite him to the U.S. (after a legal process). AP News
Legal Charges: Fraud (securities/commodities), money laundering, etc. Financial Times
Outcome: As per last reports, he has been extradited to the U.S., where he will face trial. Financial Times
Significance:
Raises issues of which country has primary claim (victim location, where scheme marketed, where defendants are, regulatory breaches).
Shows how different countries may compete or coordinate over extradition.
Demonstrates how crypto products may fall under securities/commodities regulation, not just criminal fraud statutes.
Case 6: Besciokov / Garantex (Russia / India / U.S. etc.)
Facts: Aleksej Besciokov, a Russian‑Lithuanian citizen residing in Russia, allegedly an admin of Garantex, a Russian crypto exchange that was sanctioned. U.S. alleges the exchange was involved in vast crypto money laundering, sanctions evasion, ties to cybercrime, terrorism, etc. India arrested him after a U.S. request. The Crypto Times
Jurisdictional aspects:
U.S. asserting jurisdiction via its sanctions laws, financial transmission channels, etc.
India cooperating by making the arrest. Extradition processes likely in motion.
Legal Charges: Conspiracy to launder money, violating sanctions, operating an unlicensed money‑transmitting business. The Crypto Times
Outcome: Arrested; proceedings pending. Possible extradition to the U.S. The Crypto Times
Significance:
Another example of how sanctions regimes are enforced via cross‑border law enforcement cooperation.
Demonstrates that holding persons abroad to account depends on arrest, extradition or assets located in cooperating jurisdictions.
Legal Principles & Case Law: Deeper Dive
Here are some principles from existing cases and precedents (with case law) that frequently come up in cross‑border crypto prosecutions:
Principle: The “Anwar” Principle (UK)
In Regina v Anwar [2013] EWCA Crim 1865, the UK Court of Appeal held that under the Proceeds of Crime Act 2002, it is sufficient that property is criminal property (i.e. known or reasonably suspected to be derived from “some” crime), even if the underlying crime is unspecified in the prosecution (or remote), as long as there is enough evidence to show a link. CaseMine
This principle allows prosecutors to focus on recovering/disrupting criminal property (incl. crypto) even when proving the underlying fraud, theft or other offence might be difficult because of foreign law, foreign jurisdiction, or unwillingness of witnesses abroad.
In the Qian (UK‑China) case above, prosecutors are making use of this principle by charging Qian for possession and transfer of criminal property, rather than trying to prosecute the fraud that allegedly happened in China. This helps circumvent problems like lack of access to foreign evidence or reluctant foreign cooperation.
Principle: Extradition of Crypto Suspects
The BTC‑e / Vinnik case is a good example. U.S. requested his extradition from Greece. The court / legal authorities in Greece had to determine whether the U.S. charges corresponded to Greek offences, whether evidence was sufficient, coherence with extradition treaty obligations, etc. This is standard in extradition processes: the requesting state must show prima facie case, alignment with treaty obligations, etc.
In the Do Kwon case, Montenegro eventually approved extradition to the U.S. after legal proceedings to decide which country should get him, whether the legal requirements are met.
Principle: Sanctions & Extraterritorial Laws
The U.S. uses U.S. sanctions laws (e.g. via OFAC) and anti‑money laundering requirements that sometimes reach activities outside U.S. territory (if using U.S. financial or payment systems; U.S. persons, etc.). For example, in the Evita Pay / Garantex case, charges include sanctions violations, because facilitating financial operations for sanctioned banks or entities makes you liable under U.S. law even if you are abroad.
Also, the case of Virgil Griffith (though not crypto fraud in the traditional sense) — U.S. citizen who gave information in a way that helped North Korea evade sanctions via crypto. Sentenced under U.S. law though much activity abroad. (Mentioned in GAO report) U.S. Government Accountability Office
Principle: Possession and Transfer as Independent Offences
Many jurisdictions have offences for possession of criminal property, or acquiring / transferring such property, even if the original predicate offence (fraud, theft, etc.) is abroad. With crypto, once one establishes that proceeds are “tainted” (i.e. derived from crime), then possession / transfer in the prosecutor’s territory is prosecutable.
The Qian case in the UK is a live example: even though the fraud allegedly happened entirely in China, the UK prosecutes Qian for possessing / transferring criminal property (Bitcoin) in the UK.
Comparative Analysis: What These Cases Teach
From looking across these cases, we can see patterns and lessons relevant wherever cross‑border crypto crime is concerned:
| Challenge | What works / what doesn’t |
|---|---|
| Gathering foreign evidence | Obtaining victims’ statements, company documents, exchange data in foreign jurisdictions can be difficult. What works is using international cooperation (MLA, treaties), also using public blockchain data and metadata as strong leads. |
| Proving predicate crime | Sometimes hard if it’s abroad. Prosecutors often avoid requiring full proof of predicate crime by focusing on possession or transfer of criminal property when those offences exist domestically. |
| Jurisdictional pushback | Defendants often argue foreign law differences, double jeopardy, or lack of corresponding offence. Successful prosecutions usually rely on some nexus (use of financial systems, possession / transfer in local territory, etc.). |
| Enforcement & asset recovery | Even after conviction, recovering or freezing assets is hard if assets are held in hostile or non‑cooperative jurisdictions or using privacy‑preserving tools / mixing services. Civil forfeiture or unexplained wealth orders are sometimes involved. |
| Sanctions enforcement & AML compliance | Sanctions violations are becoming more common grounds for prosecution. Exchanges not complying with AML / KYC are increasingly exposed. The “risk profile” of a service (e.g. whether it serves customers in sanctioned states, or remits through U.S. dollar networks) matters. |
Possible Additional Case Examples
Here are a few more, in brief, that illustrate similar cross‑border issues:
Virgil Griffith – U.S. citizen who gave technical information to help North Korea evade sanctions via crypto. Shows extraterritorial reach. (Convicted) U.S. Government Accountability Office
Sanctions evasion by Russian / Venezuelan nationals using crypto – U.S. prosecutions of individuals who used shell companies, crypto transactions, etc., to facilitate trade or procurement with sanctioned entities. U.S. Government Accountability Office+1
Open Questions / Legal Gaps
How different jurisdictions define “criminal property” / predicate offence, and whether they accept possession / transfer charges when the underlying crime is foreign.
Whether international treaties (extradition, MLA) sufficiently cover crypto‑specific offences (e.g. whether “possession of criminal property” includes crypto, whether laws have been updated to cover crypto).
Dealing with mixing services, privacy coins, cross‑chain transfers: tracing becomes harder, so legal tools to compel disclosures from exchanges, or regulate privacy tools, are evolving.
Balancing sanctions enforcement, privacy, and legitimate use: law‑makers are still defining how far extraterritorial jurisdiction can go, and what protection defendants have.
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