USA and Russia in Extradition Tug of War over Alleged Bitcoin Scammer

A Greek court has accepted an extradition request from Russia concerning a Russian national imprisoned in Thessaloniki, according to Associated Press. Sounds simple, but the Greeks had already agreed to extradite him to France – and he was originally arrested on a international warrant issued by the US.

BTC-e website in July 2017

Time to buy the dip?

The prisoner and the charges

The prisoner is a 38-year-old computer programmer called Alexander Vinnik. The charges relate to his connection to a $4 billion money laundering operation and a cryptocurrency exchange called BTC-e.

BTC-e was a cryptocurrency exchange, operational between July 2011 and July 2017. It offered trading in the dollar, rouble and euro against a selection of cryptocurrencies. By February 2015 it was handling an estimated 3% of the world’s Bitcoin exchange volume, and as of July 2017 the exchange had received over $4 billion worth of Bitcoin.

According to the indictment of the US Attorney of the District of California dated July 2017, BTC-e facilitated criminal transactions worldwide, and Vinnik personally profited from these via the multiple accounts that he held at the business. It also alleges that Vinnik was the primary owner of the exchange’s managing shell company, Canton Business Corporation.

Don Fort of the IRS criminal investigation said: “Mr. Vinnik is alleged to have committed and facilitated a wide range of crimes that go far beyond the lack of regulation of the bitcoin exchange he operated. Through his actions, it is alleged that he stole identities, facilitated drug trafficking, and helped to launder criminal proceeds from syndicates around the world.”

In addition to these charges, the authorities claim that he was complicit in the theft of 630,000 bitcoins from Japanese cryptocurrency exchange Mt Gox in 2013. Specifically, that approximately 300,000 BTC was channelled through accounts associated with Vinnik.

If he ends up in the US, he faces up to 55 years in prison and a fine of $12 million. BTC-e itself is being charged $110 million.

Wanted by France, the US and Russia

On the 14th of July 2018, extradition to France was approved by the court. France requested this because around 100 French citizens were allegedly defrauded by Vinnik, but the defendant’s lawyer confirmed that this would be but a stepping stone on a journey further west.

In response to this, the Russian Ministry of Foreign Affairs criticised Greek authorities, accusing them of complicating relations between Greece and Russia. It said that as a Russian, Vinnik should be extradited to that country. Interestingly, in May 2018, Russian media reported that a plot to murder Vinnik was uncovered in Greece. Sputnik quoted a source saying that some people were “extremely interested in him not coming to Russia.”

On his part, Vinnik claims that he was only a technical consultant for BTC-e. He denies all allegations and told judges “that he was committed to fighting U.S. dominance of the global financial system,” according to Associated Press.