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Bitcoin exchange founder sentenced to prison for money laundering - Engadget

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Courts in Thessaloniki, Greece rules extradition of the Russian bitcoin master suspect Alexander Vinnik to France after the French authorities request. Vinnik claimed that if the crimes have occurred in Greece, then he should be judged in Greek courts and appealed the court's decision. Alexander Vinnik was wearing a red Fifa World Cup - Russia 2018 t-shirt. Thessaloniki, Greece - July 13, 2018 (Photo by Nicolas Economou/NurPhoto via Getty Images)
NurPhoto via Getty Images

Alexander Vinnick, the Russian man who founded and ran the now-defunct Bitcoin exchange service BTC-e, has been sentenced to five years in prison. A Paris court has found Vinnick guilty of money laundering and has ordered him to pay €100,000 (US$121,000) in fines. Vinnick was arrested in Greece back in 2017 under an international warrant issued by the US Department of Justice and was extradited to France earlier this year.

The Justice Department accused Vinnick of operating BTC-e as a front for a massive money laundering operation that accepted stolen funds from cyberattacks. Security firm Wizsec previously linked his private BTC-e accounts to funds stolen from Mt. Gox. If you’ll recall, around $480 million worth of Bitcoins disappeared from the exchange service back in 2014 due to, as Mt. Gox CEO Mark Karpeles called them, "weaknesses in the system."

The US DOJ charged Vinnick with 17 counts of laundering up to $4 billion since the exchange was founded in 2011. Meanwhile, French prosecutors charged him for “extortion, conspiracy and harming automatic data-processing systems.” French authorities believe he helped create the ransomware “Locky,” which was spread through email and was used to attack French businesses and organizations between 2016 and 2018. At least 20 entities in the country ended up paying ransom money in Bitcoin to get their networks freed.

Vinnik’s side argued in court that he was only a technical operator carrying out instructions from BTC-e’s directors. While the court still ended up convicting him for money laundering, it’s hardly the worst-case scenario for Vinnick. According to ZDNet, French prosecutors were only able to prove one of the 14 charges brought against him, and it wasn’t the one involving Locky. That means he was able to avoid the 10-year sentence and the €750,000 fine the prosecutors had requested.

In this article: Alexander Vinnick, Bitcoin, news, gear
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