BTC-e Operator Vinnik Sentenced to 5 Years in Prison on Money Laundering Charges

7 December 2020

Alexander Vinnik, an alleged operator of the now-defunct cryptocurrency exchange BTC-e, was sentenced to a five year prison term for money laundering on Monday.

A court in Paris found the Russian national Vinnik guilty of money laundering, though French prosecutors also charged Vinnik with “extortion, conspiracy and harming automatic data-processing systems.” They alleged that, in particular, he helped to develop the Locky malware. These other charges were dropped by the court today.

Vinnik was extradited to France from Greece at the beginning of 2020, where he’d been since his 2017 arrest. Vinnink was arrested on a resort near the city of Thessaloniki at the request of the U.S. Department of Justice (DOJ).

The DOJ named him as a mastermind behind one of the first cryptocurrency exchanges, BTC-e, and indicted him on allegations of “computer intrusions and hacking incidents, ransomware scams, identity theft schemes, corrupt public officials, and narcotics distribution rings.” The exchange was shut down at the time, with its domain seized by the FBI. The exchange soon reemerged under the name WEX, but went down just one year later.

After Vinnik’s arrest, the U.S., Russia and France fought for his extradition, with France ultimately winning. The U.S. is still seeking to get Vinnik, said attorney Frederic Belot, who represents Vinnik. H declined to explain how this could be achieved.

Strategy disputes

Belot believes that Vinnik had a chance for total acquittal if he participated in the court investigation during this year. He chose not to do so under the advice of his other two lawyers, Zoe Konstantopoulou and Ariane Zimra, who had been working with the defendant before Belot joined the case, Belot said.

Belot said all the proof of Vinnik’s criminal behavior was provided to the French prosecutor by the FBI. The authenticity of those documents could have been contested if Vinnik took a more active role in the investigative process.

“Alexander decided to keep silence and not to ask anything or reply to any questions of the judge. And the consequence we can see is that Alexander is sentenced guilty,” Belot said.

Zimra told CoinDesk that Vinnik, on the contrary, “wanted to cooperate very much and said so,” but he didn’t have access to his file in Russian, his native language, so he “couldn’t defend himself nor know what was held against him.” Zimra did not clarify if Vinnik actually responded to questions from the court or not.

According to Zimra, Vinnik has two kids in Russia, after his wife died of cancer on Nov. 11. The kids, aged six and nine, now live with their grandmother, Vinnik’s mother, Belot said.

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