Alleged BTC-e Owner and Bitcoin Fraud to be Extradited to Russia
Sep 6, 2018 at 8:34 am UTC by Polina Chernykh · 3 min read
The government of Greece has approved the extradition of Alexander Vinnik to Russia, where he is wanted on fraud charges amounting to around $10,000.
Alexander Vinnik, a 39-year-old Russian national who is now being held in a Greek prison, will be sent to Russia where he will face charges of cyber fraud. According to Russian news agency RIA Novosti, the decision on extradition will be legally issued by the Supreme Court of Greece on September 14 and will come into effect the same day.
Vinnik was arrested in 2017 after US prosecutors accused him of operating a cryptocurrency exchange BTC-e that helped criminals to launder a total of over $4 billion. The platform didn’t perform the verification of users, allowing them to send money anonymously. Besides, Vinnik was suspected of participating in the hacking attack against former Japanese exchange Mt.Gox.
The cryptocurrency analytics company Elliptic claimed the exchange transferred illegal funds to a Russian military intelligence hacking unit named Fancy Bear. The group is accused of stealing Democrats’ email databases to change the results of the US elections in 2016.
To find specific transactions, Elliptic searched the blockchain using the details given in the indictment, including the transfer of 0.026043 bitcoin on February 1, 2016.
“There was a strong link between much of the funds allegedly used by the Fancy Bear group and BTC-e,” Tom Robinson, Elliptic’s chief data officer, told Bloomberg. “What I can’t say for certain is whether Fancy Bear obtained them directly from BTC-e, or whether there was an intermediary.”
After his arrest last year, the justice system in Greece also received extradition requests from the US and France where Vinnik is facing more serious accusations. The Russian government argued the Greek government should approve their request first since Vinnik is a Russian citizen and even considered retaliation against Greece if it hands him to one of the two other countries.
“We are categorically against the extradition of our nationals to foreign countries, in this case to the U.S.,” said Deputy Foreign Minister Alexei Meshkov.
According to the Vinnik’s lawyer, Ilias Spyrliadis, his client denies all charges, including the French charges of money laundering, and has no control over the $9 billion worth of bitcoin that flowed through his exchange BTC-e. As far as Russian crypto fraud charges, Vinnik will not make any comments, Spyrliadis said.
Moreover, Vinnik claimed he didn’t know who was using BTC-e and he was “in no way running it.” “Mr. Vinnik could sometimes see a passport and ID when performing the transactions, but was in no place to know whether this person was using a fake ID, whether he or she was wanted by Interpol or involved in anything,” Spyrliadis noted.
BTC-e was seized by authorities following Vinnik’s arrest and was ultimately rebranded and relaunched on the new exchange domain Wex.nz. As per official statement, the platform is now fully AML/KYC compliant.
Vinnik, meantime, is not the first Russian hacker indicated by the US government, who are believed to provide information on Russian cybercrime that goes beyond their cases. In April, Pyotr Levashov, 37, was arrested in Spain on suspicion of operating a computer bot that sent millions of spam emails. Another Russian, Yevgeniy Nikulin, was handed over to the US by Czech justice officials where he is charged with hacking Dropbox and LinkedIn websites.
Polina is an undergraduate student at Belarusian State Economic University (BSEU) where she is studying at the faculty of International Business Communication for a degree specializing in Intercultural Communication. In her spare time she enjoys drawing, music and travelling.