Police Commissioner Andrew Coster said in a statement on Monday that “the money is linked to the Canton Business Corporation and its owner Alexander Vinnik, who was holding funds in a New Zealand company.
“Canton and Vinnik previously operated cryptocurrency exchange BTC-e.”
New Zealand police alleged that U.S.-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 victimisation 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,’’ Coster said.
According to him, 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.