The Crazy Case of Alexander Vinnik

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Alexander Vinnik’s story is in many ways symptomatic of cryptocurrency itself – drama, criminal activity, and a heavy dose of anti-establishmentism. The founder of the defunct crypto exchange BTC-e was extradited to France on Thursday to face money laundering charges after an almighty legal battle between three countries across two continents, and his story is a crazy tale of bad judgement compounded by the inefficiencies of the international legal system.

BTC-e Goes from 0-60

Vinnik, a 39-year-old Russian national, founded crypto exchange BTC-e in 2011. Initially it didn’t make many waves in the fledgling space, although business boomed around the time of the Mt. Gox collapse in 2014 – almost overnight the exchange could boast nearly 570,000 users and held over 79,000. This was at a time when little to no KYC/AML records were kept by any exchange, and certainly not by BTC-e, with the result that it soon became a haven for illegal transactions and a place where stolen BTC could be sold for cash. It is little surprise therefore that BTC-e was behind the receipt and selling of a huge percentage of the 850,000 stolen from Mt. Gox.

This is when the authorities began to get interested in BTC-e, and Vinnik in turn. As investigations began into the collapse of Mt. Gox, BTC-e was highlighted as not just the terminus of hundreds of thousands of the Mt. Gox BTC but also a place where the proceeds of millions of dollars’ worth of illegal goods sales were cashed out.

Vinnik Named and Arrested

US authorities sought to obtain the identity of the person or persons behind BTC-e, discovering the truth in early 2017 – Alexander Vinnik was behind the whole thing. On July 25, 2017, while on vacation in Greece, Vinnik was arrested by undercover police on a US arrest warrant, accused of laundering more than $4 billion on behalf of individuals involved in crimes including computer hacking and drug trafficking. BTC-e was seized and taken offline by the same authorities the same day.

The US prepared extradition papers, but soon there was a twist in the tale – France and Russia wanted to extradite him too on similar charges. A court in Thessaloniki initially ruled to extradite him to the US, but after Russian pressure changed their minds and acceded to Vinnik’s request to be extradited to Russia, where he faced a lesser charge. However, in late 2017 the Greek Supreme Court overruled the court’s change of heart and re-authorized his extradition to the US. Vinnik appealed, but this appeal was rejected and he seemed set for the US.

Russia and France Fight Their Corner

Russia and France were not done however and continued to press their case over the next twelve months, with the result that in mid July 2018 the Thessaloniki court changed their minds and authorized his extradition to France instead, causing Russian officials to threaten reprisals. This seemed to work, and two weeks later they changed course once more and re-approved the Russian request. This decision was backed by the Supreme Court, angering the US and France, with the former offering Vinnik a plea deal, which he rejected.

French Police Foil Poisoning Plot

The Vinnik case took an even stranger turn when, in May 2018, an assassination plot against Vinnik was foiled by Greek police. Police allegedly received intelligence that Russian nationals thought to be at risk of exposure in any trial were planning to poison Vinnik. As a result he was restricted from receiving food or drink from persons unknown to him.

Around the same time, Russia put in yet another extradition request, which both the Thessaloniki and Supreme courts accepted…only for another French request to block that decision in September 2018.

In between these two events, Vinnik also found himself tied up with the Mueller investigation into US President Donald Trump, after BTC-e was found to have handled BTC connected to Fancy Bear, a cyber-espionage group thought to be involved in Russian interference in the 2016 election, with a “strong link” between the pair detected. Happily for Vinnik, these investigations were not pursued.

Vinnik Goes on Hunger Strike

Back in Greece, the Supreme Court upheld the French extradition request, and Vinnik finally looked to be on his way. However, no doubt pissed off with all the buggering about, Vinnik went on hunger strike, although this was officially put down as being a protest against his treatment and his lack of a fair trial by Greek courts.

Vinnik stated during the Supreme Court hearings that he would only end his hunger strike if he was extradited to Russia, having lost over 30% of his bodyweight. This didn’t work, and Vinnik was left with no option but to appeal in March 2019 for release back to Russia on for humanitarian reasons, turning up to court in an ambulance, such was the parlous state of his health. This appeal was rejected, and Vinnik was sentenced to remain in Geek custody until January 11, 2020 pending the rubber stamping of his extradition to France, ending his hunger strike during this period.

France Extradition Confirmed

Vinnik’s time in purgatory finally seemed to be coming to an end when, in mid December 2019, Justice Minister Konstantinos Tsiaras ruled that Vinnik should be extradited first to France, then to the US and, finally to Russia. Vinnik launched another hunger strike in protest, but this did no good, and Tsiaras’ decision was upheld by the Council of State in early January this year, marking the official end of the saga. After spending one and a half years being engaged in a three-way international battle, Vinnik’s future was finally settled, and on Thursday he finally left Greece for France, where he faced immediate interrogation.

Vinnik’s Bleak Future

What happens to Vinnik from here is, of course, uncertain. Whether he is found guilty or acquitted by French courts, he will be whisked straight off to the US where his lawyer has equated his likely punishment in light of a guilty verdict to “a death sentence”. If he somehow manages to wriggle out of that one he will be packed off back to Mother Russia, where he wanted to be all along, to face fraud charges.

It is highly unlikely that Vinnik will escape all three attempts to imprison him, it’s just a case of who manages to nail him down first. Either way, Alexander Vinnik’s next few years of his life will likely be as bad, if not worse, than his past two and a half. Although at least he might get a chance to rack up some air miles.