Russian Crypto Fraudster Trialed Over Billions in Laundered Bitcoin

Forty-year-old Russian computer expert, Alexander Vinnik, allegedly supervised and operated a Russian cryptocurrency exchange called BTC-e from 2011 to 2017.

The alleged fraudster is also wanted by Washington and Moscow, according to statements from his lawyer and recent reports.

Extradition Tussle: France, Russia, and America

Vinnik was arrested in Greece in 2017 at the request of the U.S. on suspicion of laundering as much as $4 billion through BTC-e. He was extradited from Greece to France in January this year in a move that ignited a three-way extradition tussle between France, Russia, and the U.S.

U.S. authorities have him on 21 charges ranging for identity theft and facilitating drug trafficking to money laundering. At the same time, the French accuse him of defrauding more than 100 people in 6 cities between 2016 and 2018, the report added.

Vinnik has denied any wrongdoing and sought extradition to Russia, where he is wanted on lesser fraud charges involving just $11,000.

However, a Paris-based judge ruled that Vinnik will stand trial in France for a range of offenses, including extortion, aggravated money laundering, criminal association, and fraudulently data manipulation.

Four Year Fight

Though little known now, BTC-e was one of the largest Bitcoin exchanges during the early days of the cryptocurrency in 2011. By February 2015, it handled around 3% of all BTC exchange volume. Up until its demise three years ago, the exchange allowed trading between the USD, Russian Ruble, and Euro, for BTC, ETH, LTC, and a handful of smaller cryptocurrencies.

In July 2017, U.S..S. authorities seized the BTC-e.com domain name, server equipment at one of their data centers, and 38% of all customer funds alleging connections with laundered funds from the Mt.Gox hack.

According to AFP, The U.S. Treasury Department has already fined BTC-e $110 million for ‘wilfully violating’ anti-money laundering laws, and Vinnik himself has been ordered to pay $12 million.

In June, police in New Zealand seized $90 Million worth of assets from Vinnik as the global investigation continued.

France opened a probe in 2016 after victims of ransomware filed complaints, their investigation revealed links between the malware and Vinnik.

London-based blockchain analysis firm, Elliptic, believes that BTC-e may have been used by Russian cyber espionage group, Fancy Bear, during state cyber-attacks in 2015 and 2016.

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Source: Crypto Potato