Bitcoin Exchange founder sentenced to prison for money laundering

Authorities believe Alexander Vinnick was running BTC-e as a front for money laundering.

3 min read

This article has been translated from our English edition.

Bitcoin Exchange founder sentenced to prison for money laundering
Bitcoin Exchange founder sentenced to prison for money laundering

This story originally appeared on Engadget

Alexander Vinnick, the Russian who founded and ran the now defunct money exchange service Bitcoin BTC-e, was sentenced to five years in prison. A Paris court found Vinnick guilty of money laundering and ordered him to pay fines of € 100,000. Vinnick was arrested in Greece in 2017 on an international arrest warrant from the US Department of Justice and extradited to France earlier this year.

The Justice Department accused Vinnick of running BTC-e as a front line for massive money laundering that accepted funds from cyberattacks. Security firm Wizsec previously linked their private BTC-e accounts to funds stolen from Mt. Gox. If you remember, in 2014 around $ 480 million bitcoins disappeared from the exchange service because Mark Karpeles, CEO of Mt. Gox, described them as “weaknesses in the system”.

Vinnick has been charged by the US Department of Justice on 17 money laundering cases totaling up to $ 4 billion since the exchange was founded in 2011. In the meantime, French prosecutors have charged him with “extortion, conspiracy and damage to automated systems”. Data Processing “. The French authorities believe he was involved in the development of the” Locky “ransomware, which was distributed via email and used by French companies and organizations between 2016 and 2018. At least 20 companies in the country paid the ransom in Bitcoin to free their networks.

Vinnik’s side argued in court that he was just a technical trader who followed instructions from the directors of BTC-e. While the court still found him convicted of money laundering, this isn’t the worst case scenario for Vinnick. according to ZDNetFrench prosecutors could only prove one of the 14 charges brought against him, and it was not the one Locky was involved in. That means he was able to avoid the 10-year prison sentence and the € 750,000 fine requested by the prosecutor.

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