US Extradites Russian Accused of Crypto LaunderingAlexander Vinnik Makes First Apperance in US Federal Court
A Russian national accused of running a cryptocurrency exchange used to launder proceeds from hacking made his first appearance before San Francisco federal court today.
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 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 decscribes Vinnik as a "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 anyonmize 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 seized the money from Canton Business Corp., which Vinnik allegedly used to shelter stolen funds.