Russian citizen Alexander Vinik is believed to have landed in the US after a long-running extradition battle between the US, Russia and France on charges related to crypto-money laundering. The US tactical victory reportedly comes on the heels of basketball star Brittney Greener being “illegally” detained and sentenced to nine years in Russia, in what has been described as a political hostage situation.
Vinnik is best known for allegedly operating BTC-e, a crypto exchange that served clients from 2011 to 2017. Lawyers say it was known for its inability to collect user identity information, which made it popular among criminals – yet in its early days it was even used by CoinDesk to find the “true” price of Bitcoin on exchanges.
In 2015, it was reported to be responsible for 3% of all Bitcoin trading. In 2017, it was estimated that 95% of all ransomware payments ever recorded were laundered through BTC-e.
Vinik served five years in prison on crypto-money laundering charges in connection with the “Locky” malware hacking team, which targeted French and German investors between 2016 and 2018. He was arrested in Thessaloniki, Greece, while on vacation with his family and extradited to France in 2020 to complete his sentence.
The US, France and Russia were eager to keep Vinik. The Russian national expressed a desire to be tried in his home country due to the limited gravity of the charges. In the end, however, France won.
Now that Vinik has served his sentence there, the US and Russia have been fighting to extradite him to face prosecution on his own criminal charges. The Russian’s lawyer, Frederic Bello, told CoinDesk that in order to protect the crypto exchange operator, The US withdrew its bid due to a legal loophole it would nullify extradition rights in favor of the US.
- The US withdrew its request to extradite Vinik from France on July 15.
- Bello said at the time that the move would allow the U.S. to detain Vinik for a longer period and eventually extradite him back to Greece.
- From there, an extradition request from Greece to the US could be reactivated, the lawyer said.
That appears to have come to fruition, with Vinik reportedly taking a private jet to Boston and then on to San Francisco on Thursday, according to Russian state media RIA Novosti. The Russian citizen is expected to appear before the court in the US Northern District of California.
There, Vinik faces 21 charges in the US with a maximum sentence of 55 years:
- One count of operating an unlicensed money services business,
- one count of conspiracy to commit money laundering,
- 17 money laundering points,
- and two counts of engaging in illegal monetary transactions.
According to the Department of Justice, BTC-e received more than $4 billion worth of bitcoin in its six years of operation. In 2017, the U.S. Treasury Department fined $110 million in civil money “for willfully violating U.S. anti-money laundering laws” and a $12 million fee against Vinnik, CNN reported.
Read more: US pressures Japan to cut crypto ties with Russia
President Biden and his administration are under intense pressure to secure a successful prisoner swap with Russia to free two American citizens currently held there – basketball star Brittney Griner and ex-Marine Paul Whelan.
Russia initially suggested it would consider a swap for convicted arms dealer Viktor Bout, a criminal so notorious he was the inspiration for the 2005 film Lord of War, starring Nicolas Cage.
Analysts criticized the trade, calling it uneven and a sign of US weakness if we agree. The Biden administration recently agreed to the swap — only now Russia wants two prisoners instead of one.
The alleged US loophole to secure Vinik’s extradition has given it back some bargaining power, but it remains to be seen whether it will be enough to sway the Kremlin. In Russia, Vinnik faces only minor crypto fraud charges involving €9,500.
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