Alexander Vinnik Explained

Alexander Vinnik
Native Name:Александр Винник
Birth Name:Alexander Vinnik
Birth Date: 1979[1]
Birth Place:Kurgan, Kurgan Oblast
Other Names:Sasha WME
Citizenship:Russian
Known For:BTC-e
Criminal Charge:[2] [3]
Conviction:Money laundering
Conviction Penalty:5 years in prison in France but he was sent back to Greece and then to the United States to await sentencing as of August 5th, 2022.

Alexander Vinnik (Russian: Александр Винник) is a Russian computer expert. From 2011 to 2017, he worked at BTC-e, a Russian cryptocurrency exchange.

BTC-e

See main article: BTC-e. Vinnik is alleged to have directed and supervised the operations and finances of the BTC-e cryptocurrency exchange from 2011 to 2017.[4]

In 2020, the London-based cryptocurrency analysis firm Elliptic claimed that BTC-e may have been used by Fancy Bear during the 2015–2016 Democratic National Committee cyber attacks.[5]

BTC-e assets were ultimately acquired by Konstantin Malofeev under the control of the FSB.[6]

Arrest

On July 25, 2017, Vinnik was arrested in Ouranoupoli, Greece[7] at the request of the U.S. on suspicion of laundering $4 billion through the digital currency Bitcoin (BTC-e).[8] At the time, Vinnik denied the charges.[9]

In late July 2017, the U.S. requested Vinnik's extradition from Greece.[10] In early October 2017, his extradition was requested by the Prosecutor General of Russia.[11]

In late June 2018, France requested his extradition, accusing him of fraud.[12]

In early July 2018, Russia submitted a new extradition request, reportedly based on a confession to additional hacking offenses.[13]

In November 2018, Vinnik went on a three-month hunger strike in protest of his detainment in Greece.[14]

In January 2020, Vinnik was extradited to France.[15]

In June 2020, New Zealand Police announced the seizure of $90 million from WME Capital Management, a company in New Zealand registered to Vinnik.[16] [17]

On August 5, 2022, the United States Justice Department released a statement saying he made his first appearance that morning for the 21-count superseding indictment from January 2017. The federal court he appeared at was in San Francisco, California.[18]

In May 2024, Vinnik pleaded guilty to conspiracy to commit money laundering.[19] Vinnik's lawyer, Arkady Bukh, stated that he pled guilty "on a restricted number of charges," and that as a result of the plea bargain Bukh now expected Vinnik to get a prison term of less than 10 years.

Sentencing

In December 2020, Vinnik was acquitted on involvement with the Locky ransomware charges, but was sentenced to five years in prison for money laundering.[20]

U.S. extradition

On August 4, 2022, Vinnik was extradited from Greece to the United States to face charges of money laundering and operation of an unlicensed money service business in the US.[21]

Notes and References

  1. News: Lloyd . Timothy . US and Russia Spar Over Accused Crypto-Launderer . OCCRP . 24 January 2019 . en.
  2. News: France charges bitcoin expert Vinnik with money laundering . January 24, 2020 . . French officials have filed preliminary charges of money laundering and extortion against Russian bitcoin fraud suspect Alexander Vinnik, who’s tangled in a multi-country legal battle. . https://archive.today/20200628004417/https://apnews.com/e7524bf8215dea8013777ef88f4e2f83 . June 28, 2020 . live . June 28, 2020 .
  3. News: Sebag . Gaspard . Russian Bitcoin Suspect Charged in France After Greek Extradition . January 28, 2020 . . In France, Vinnik was charged with extortion, aggravated money laundering, conspiracy, and harming automatic data-processing systems, according to an official at the Paris prosecutor’s office. . https://archive.today/20200627040837/https://www.bloomberg.com/news/articles/2020-01-28/russian-cyber-suspect-charged-in-france-after-greek-extradition . June 27, 2020 . live . June 28, 2020 .
  4. Web site: USA V. BTC-e and VINNIK . July 26, 2017 . Northern District of California . Since at least approximately 2011 through and including the present, both dates being approximate and inclusive, the defendant BTC-e operated as one of the world's largest and most widely used digital currency exchanges. Since its inception, BTC-e was an exchange for cybercriminals worldwide, and one of the principal entities used to launder and liquidate criminal proceeds from digital currencies, including Bitcoin, to fiat currency, including U.S. dollars, Euros, and Rubles. At all relevant times, the defendant ALEXANDER VINNIK, together with individuals known and unknown, directed and supervised BTC-e's operations and finances. .
  5. News: Chrepa . Eleni . Kharif . Olga . Mehrotra . Kartikay . Bitcoin Suspect Could Shed Light on Russian Mueller Targets . September 14, 2018 . Bloomberg News . The expert, Russian citizen Alexander Vinnik, was detained last year after U.S. prosecutors in San Francisco accused him of supervising a digital-currency exchange that helped criminals launder billions of dollars. That exchange, according to cryptocurrency analysis firm Elliptic, handled some Bitcoins traced to Fancy Bear, a hacking unit. Fancy Bear is one of the names for the Russian military intelligence officers who Mueller separately accuses of stealing and releasing Democrats’ emails to sway votes in the 2016 elections. [...] Elliptic used details provided in the indictment, such as a transfer of exactly 0.026043 Bitcoin on Feb. 1, 2016, to search the electronic register of all Bitcoin transactions -- known as the blockchain -- to find specific payments. It then used software it has developed to identify the origin of the funds for those transactions. “There was a strong link between much of the funds allegedly used by the Fancy Bear group and BTC-e," said Tom Robinson, Elliptic’s chief data officer. “What I can’t say for certain is whether Fancy Bear obtained them directly from BTC-e, or whether there was an intermediary." . https://archive.today/20200220075423/https://www.bloomberg.com/news/articles/2018-09-04/bitcoin-suspect-could-shed-light-on-russians-targeted-by-mueller . February 20, 2020 . live . June 28, 2020 .
  6. Web site: Russian Agents Suspected of Cleaning Bitcoin-Exchange Platform . 2023-03-07 . www.occrp.org . en-GB.
  7. Book: Magnuson, William . Blockchain Democracy . Cambridge University Press . 2020-02-27 . 978-1-108-48236-3 .
  8. News: Russian National And Bitcoin Exchange Charged In 21-Count Indictment For Operating Alleged International Money Laundering Scheme And Allegedly Laundering Funds From Hack Of Mt. Gox . July 26, 2017 . . Vinnik was arrested in Greece on July 25. [...] The investigation has revealed that BTC-e received more than $4 billion worth of bitcoin over the course of its operation. . https://archive.today/20170727045201/https://www.justice.gov/usao-ndca/pr/russian-national-and-bitcoin-exchange-charged-21-count-indictment-operating-alleged . July 27, 2017 . live . June 28, 2020 .
  9. News: Alexander Vinnik: Arrest abroad threatens all Russian IT specialists . November 16, 2017 . RIA Novosti . The Americans accuse me of laundering either four, then six, or nine billion dollars. The amount is constantly changing. They themselves do not know. MTC took up the exchange, because it is organized in Russia. I do not know what they want. Maybe find some Russian trace. America and Russia have strained relations, everyone knows that. They are constantly abducting Russian citizens. I didn’t hide from justice. I traveled abroad under my name. Under my name I was doing business. What they accuse me of is complete nonsense. This, firstly, is impossible to do for one person. Secondly, they even violate their laws, the charge is made in violation of American laws. And from a technical point of view, the charge is very unprofessional. . https://archive.today/20200625040517/https://ria.ru/20171116/1508928184.html . June 25, 2020 . live . June 28, 2020 .
  10. News: Bitcoin fraud suspect arrested in Greece . July 26, 2017 . . Police said 38-year-old Alexander Vinnik was held on a US warrant near the northern city of Thessaloniki. . https://archive.today/20170726164723/http://www.bbc.com/news/world-europe-40731200 . July 26, 2017 . live . June 28, 2020 .
  11. News: Zakharov . Andrey . Greek Supreme Court ruled to extradite Russian Vinnik . December 13, 2017 . RBC . In early October, the Council of Judges of Thessaloniki granted the request of the US Department of Justice for the extradition of Vinnik, but the defense challenged him in Areopagus. At the same time, the Russian Prosecutor General’s Office also asked for the extradition: in August, the Ostankino District Court arrested him in absentia in a large-scale criminal case of fraud (up to 1 million rubles). Russia's request was also granted by a Greek court in October; Vinnik does not object to extradition to his homeland. . https://archive.today/20200627225543/https://www.rbc.ru/politics/13/12/2017/5a311ce29a7947f8d2d5ab1e . June 27, 2020 . live . June 28, 2020 .
  12. News: France asks to extradite Alexander Vinnik earlier arrested in Greece . June 27, 2018 . Crime Russia . France demands to extradite Alexander Vinnik, who was arrested at the request of the United States in Athens. The requirement has already been sent to Greece by a French prosecutor. According to the document, the Russian is accused of committing fraudulent actions, because of which the citizens of France suffered. . https://web.archive.org/web/20181021042459/https://en.crimerussia.com/gromkie-dela/france-asks-to-extradite-alexander-vinnik-earlier-arrested-in-greece/ . October 21, 2018 . dead .
  13. News: Lymar . Julia . Greek court decides to extradite Russian Alexander Vinnik to France . July 13, 2018 . RBC . At the beginning of July 2018, the Russian Prosecutor General sent a new request to Greece to extradite Vinnik to Greece. The agency reported that in March and April 2018, he appealed to the investigating authorities of Russia with a plea of confession and admitted to hacker attacks and money laundering on a particularly large scale. . https://archive.today/20200627222803/https://www.rbc.ru/society/13/07/2018/5b45c2939a79473455c6b774 . June 27, 2020 . live . June 28, 2020 .
  14. News: Defense lawyers to seek reversal of decision to extradite Vinnik to US or France . July 29, 2019 . TASS . On November 26, 2018, Vinnik went on hunger strike against judicial outrage. He claims to be a political prisoner and demands that the Greek authorities let him return to his home country. He stopped his hunger strike after three months and was hospitalized. . https://archive.today/20200627235315/https://tass.com/world/1070908 . June 27, 2020 . live . June 28, 2020 .
  15. mfa_russia . #Zakharova On January 23, Greek authorities extradited Alexander #Vinnik to #France, despite his Russian citizenship and a competing extradition request from Russia. We will continue working to secure his rights and interests. We will insist that France extradite Vinnik to Russia . January 30, 2020 . 1222901758206210048 . https://archive.today/20200627045140/https://twitter.com/mfa_russia/status/1222901758206210048 . June 27, 2020 . live .
  16. nzpolice . New Zealand Police’s Asset Recovery Unit has restrained NZD$140 million from Canton Business Corporation and its owner Alexander Vinnik who were holding funds in a New Zealand company. This is the largest restraint of funds in New Zealand Police history. . 1274963594937896960 . June 22, 2020 . https://archive.today/20200627052047/https://twitter.com/nzpolice/status/1274963594937896960 . June 27, 2020 . live .
  17. News: Perry . Nick . New Zealand seizes $90M from Russian bitcoin fraud suspect . June 22, 2020 . Associated Press . New Zealand police said Monday they had restrained 140 million New Zealand dollars ($90 million) from Canton Business Corporation and its owner, Vinnik, who were holding funds in a New Zealand company. . https://archive.today/20200628003039/https://apnews.com/6507c6b896dade5e8485f357f7a31e85 . June 28, 2020 . live . June 28, 2020 .
  18. Web site: Alleged Russian Cryptocurrency Money Launderer Extradited to United States . Department of Justice . 2022-08-05 . 2023-06-15.
  19. Web site: BTC-e Operator Pleads Guilty to Money Laundering Conspiracy . May 3, 2024 . United States Department of Justice .
  20. News: Cimpanu . Catalin . BTC-e founder sentenced to five years in prison for laundering ransomware funds . December 7, 2020 . . https://archive.today/20210116000214/https://www.zdnet.com/article/btc-e-founder-sentenced-to-five-years-in-prison-for-laundering-ransomware-funds/ . January 16, 2021 . live . December 8, 2020 .
  21. News: Lyngaas . Sean . Russian accused of money laundering and running $4B bitcoin exchange extradited to US . August 4, 2022 . . Alexander Vinnik, who is in his early 40s, is accused of operating a cryptocurrency exchange known as BTC-e that allegedly did business with ransomware gangs, drug dealers and identity thieves, according to the Justice Department. He faces charges in the US Northern District Court of California of money laundering and operating an unlicensed money service business in the US, among other charges. .

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