Russian national Alexander Vinnik is thought to have landed in the US, following a lengthy battle between the US, Russia, and France for extradition on charges related to crypto money laundering. The US’ reportedly tactical win comes hot on the heels of basketball star Brittney Griner being ‘unlawfully’ detained and sentenced to nine years in Russia, in what’s described as a political hostage situation.
Vinnik is best known for allegedly operating BTC-e, a crypto exchange that served customers from 2011 to 2017. Lawyers say it was notorious for its failure to collect user identity info, which made it popular among criminals — yet in its early days, it was even used by CoinDesk to find a ‘true’ bitcoin price across exchanges.
In 2015, it was reportedly responsible for 3% of all bitcoin trade. In 2017, it was estimated that 95% of all ransomware payments ever recorded had been washed via BTC-e.
Vinnik served five years in prison on crypto money laundering charges in relation to the “Locky” malware hacking crew that targeted French and German investors between 2016 and 2018. He was arrested in Thessaloniki, Greece while vacationing with his family and extradited to France in 2020 to finish his sentence.
The US, France, and Russia were all eager to detain Vinnik. The Russian national expressed a desire to face trial in his home country due to the limited severity of accusations. However, France ultimately won.
Now that Vinnik has served his sentence there, the US and Russia have battled it out for extradition to face prosecution for their own criminal charges. The Russian’s lawyer Frédéric Bélot told CoinDesk that in order to secure the crypto exchange operator, the US withdrew its bid in a legal loophole that would reset extradition rights in favor of the US.
- The US cancelled its request to extradite Vinnik from France on July 15.
- Bélot said at the time that this move would allow the US to keep Vinnik imprisoned for a longer period and eventually extradite him back to Greece.
- From there, a request for extradition from Greece to the US can be reactivated, the lawyer said.
This appears to have come to fruition — Vinnik reportedly took a private plane to Boston and then to San Francisco on Thursday, according to Russian state-run news outlet RIA Novosti. The Russian national is expected to make a court appearance in the US Northern District of California.
There, Vinnik faces 21 charges in the US with a maximum sentence of 55 years:
- One count of operating an unlicensed money service business,
- one count of conspiracy to commit money laundering,
- 17 counts of money laundering,
- and two counts of engaging in unlawful monetary transactions.
According to the Justice Department, BTC-e received more than $4 billion worth of bitcoin during its six years of operations. In 2017, the US Treasury outlined a $110 million civil money penalty “for wilfully violating US anti-money laundering laws” and a $12 million fee against Vinnik, CNN reports.
Vinnik crypto extradition part of prisoner tit-for-tat
President Biden and his administration have come under intense pressure to secure a successful prisoner swap with Russia in order to free two US nationals currently detained there — basketball star Brittney Griner and former marine Paul Whelan.
Russia initially suggested it would consider a swap in exchange for convicted arms dealer Viktor Bout — a criminal so notorious he was the inspiration for the 2005 film Lord of War, played by Nicolas Cage.
Analysts criticized the trade, calling it uneven and a sign of weakness for the US were it to agree. Biden’s administration recently agreed to the swap — only now, Russia wants two prisoners instead of one.
The US’ alleged loophole to secure the extradition of Vinnik has given it back some bargaining power, yet it remains to be seen whether it’ll be enough to sway the Kremlin. In Russia, Vinnik only faces small crypto fraud charges involving €9,500.