Alexander Vinnik, involved in the notorious BTC-e exchange in the EU, and the subject of a long running expedition battle between France, Russia, and the United states since his first arrest in Greece in December 2017, has finally been sentenced to serve five years in prison by a French court.
Vinnik, who prosecutors say operated the now-shuttered BTC-e exchange - once of the world’s largest digital currency exchanges, was also fined USD$121,000 in relaiton to an alleged cryptocurrency fraud scheme.
When Vinnik was first expedited to France from Greece earlier this year, he was slapped with wide-ranging charges from identity theft to drug trafficking and money laundering. Among these charges were allegations that Vinnik was the brains behind a Bitcoin ransomware known as ‘Locky’.
French authorities say he collected roughly $164 million from these attacks over a two-year period, robbing 188 businesses and individuals in the country and that he laundered the proceeds through BTC-e, which advertised itself as an anonymous way to trade Bitcoin without "even the most basic identifying information."
As we have written about before, the BTC-e exchange was also alleged to have received funds from the hackers involved in the Mt. Gox hack.
Due to a lack of evidence, the ransomware charges were dropped and Vinnik was convicted only of money laundering. Unsurprisingly, Vinnik denies any wrongdoing, claiming that he was an "ordinary freelance operator" for the BTC-e and not heavily involved in its operations as alleged. He is still yet to face authorities in Russia and the United States who are lining up to take their turn.
What's next?
In Russia, his home country, Vinnik was charged in absentia with fraud over an alleged theft of just 9,500 euros. Meanwhile, the Department of Justice has been patiently waiting with with a list of 21 charges it announced in 2017. The DOJ alleges, similar to the French allegations, that BTC-e was a clearinghouse for funds sourced from "computer intrusions and hacking incidents, ransomware scams, identity theft schemes, corrupt public officials, and narcotics distribution rings." including the Mt Gox hack and other ransomware.
This sentencing is likely to be appealed and may represent a small door closing in the Mt Gox saga, which should further move closer to a resolution in a few days when news is expected as to when the 150,000 Bitcoin held by the trustees of the Mt Gox operating company will be released to former customers of the exchange. That process has been the subject of extensive delays to date.