In case you may not have known, Alexander Vinnick is the Russian national who was arrested in Greece and accused of being the operator of BTC-e. BTC-e was an exchange that was closed down by the US authroties and has now reopened on a new domain.
The case took an important turn last week as the Greek court approved the extradition request by the United States. Of course, Vinnik can appeal the decision which he decided to do. There is also a competing extradition request from Russian authorities who want Vinnik on lesser charges.
Of course, the scope of the allegations from the US could indeed hamper the efforts by the Russians to also have him extradited. There are also beliefs that the Russian could be fighting the extradition on the basis of what Vinnik may know.
A Litany of Charges
The US government is alleging that Vinnick was the mastermind behind the BTC-e exchange. BTC-e was a large Bitcoin exchange that operated out of Russia. It was accused by the US authorities of laundering approximately $4bn for a range of cybercriminal proceeds from Malware to drug dealing.
However, BTC-e was also tied to one very well-known theft. The hacking of the MtGox exchange was one of the most well-known Bitcoin thefts of all time. The hacker managed to take away 630,000 BTC over a period of 2 years from 2011 to 2013.
Most of the funds from the MtGox hack were laundered through BTC-e according to a report by the security researchers at WizSec. They also found that these funds that came from Mt-Gox seem to have gone straight to internal storage at BTC-e instead of customer accounts. This can only mean that BTC-e was complicit.
BTC-e was also tied to a range of other Bitcoin thefts including that of Bitcoinica and Bitfloor among others. All of this evidence against BTC-e and its alleged operator are no doubt quite damming. However, what is more worrying is about what Vinnik may know.
The Extradition Battle
The Russian government also wants to have Vinnik extradited on some lesser fraud charges. They are also claiming that the US has no right to charge Vinnik as he has no ties to that country.
There could concerns in Russia about what Vinnik may tell investigators in the US if he is extradited. According to Boris Zilberman, an analyst on Russian affairs at the Foundation for the Defense of Democracies, the US government will want to unravel co-conspirators. Mr Zilberman continued to theorise that the Russian government could be worried about what he may say
Everyone is worrying about the unknowns. And the murkiest questions is — the $4 billion that he was laundering — who and what were involved? If you’re taking the more conspiratorial viewpoint, you ask, are the Russians afraid of Vinnik turning that information over to the U.S
However, the angle taken by the Russian foreign ministry is that the extradition would be a violation of international law. Vinnik had not a single association with any individual or entity in the United States. Although he may have a point, there is still quite a bit that we may not know. Only when Vinnik talks will the full extent of the BTC-e operations be exposed.
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