Blockchain & Cryptocurrency , Cybercrime , Fraud Management & Cybercrime
US Gets Russian Accused of Crypto Laundering ExtraditedAlexander Vinnik Makes First Appearance in US Federal Court
A Russian national accused of running a cryptocurrency exchange used to launder proceeds from hacking made his first appearance before a San Francisco federal court today.
See Also: LIVE Webinar | Stop, Drop (a Table) & Roll: An SQL Highlight Discussion
The United States extradited Alexander Vinnik, 42, from Greece after France returned him there Thursday for court proceedings. A Paris court sentenced Vinnik in December 2020 to a five-year sentence for money laundering. Greek authorities first arrested Vinnik in 2017 at the behest of the United States (see: Greece Will Send Russian Cybercrime Suspect to France).
Vinnik, who allegedly founded now-defunct crypto exchange BTC-e in 2011, faces up to 55 years of imprisonment under U.S. law for a raft of charges that include money laundering and engaging in unlawful monetary transactions.
Federal prosecutors say BTC-e, which shut down in 2017, received deposits worth more than $4 billion worth of bitcoin. Vinnik "maintains his innocence," his lawyer, Frédéric Bélot, tells Information Security Media Group.
Russian state-owned newswire Tass says Kremlin diplomats intend to provide him legal support during U.S. proceedings. Moscow sought his return to Russia after his arrest in Greece; Vinnik faces lesser embezzlement and computer fraud charges in Russia. Tass describes Vinnik as an "IT specialist."
Vinnik intended from the start for the exchange to be a haven for criminals, prosecutors allege, by ensuring anonymity for its users, taking steps to obscure and anonymize transactions and by not implementing anti-money laundering processes.
Among the hacking incidents that Vinnik allegedly aided through money laundering was the theft of $460 million from the now-shuttered Mt. Gox bitcoin exchange.
Department of Treasury anti-money laundering unit FinCEN in 2017 assessed a $110 million civil money penalty against BTC-e for willfully violating U.S. anti-money laundering laws and a $12 million fine against Vinnik.
In June 2020, police in New Zealand confiscated $90 million from a company allegedly owned by Vinnik. Police officials announced that they had seized the money from Canton Business Corp., which Vinnik allegedly used to shelter stolen funds.