Russian sentenced to five years for crypto laundering

The Paris court said Alexander Vinnik led the illegal Russian cryptocurrency exchange BTC-e, which laundered about $4 billion

Russian computer expert Alexander Vinnik was sentenced by a court in Paris to five years in prison yesterday, as reported from the courtroom by a Novaya Gazeta correspondent. He was found guilty of aggravated money laundering and slapped with a €100,000 ($121,000) fine, as well as the confiscation of valuables, for his part in BTC-e – an illegal Russian cryptocurrency exchange that laundered about $4 billion.

Vinnik, 41, first made headlines in July of 2017 when he was arrested in Greece on an American warrant. Shortly after the US launched extradition procedures, Russia also filed an extradition request, based on the case of the non-delivery of equipment to the Vosstroykomlit company. The Russian Prosecutor General’s Office also claimed that Vinnik contacted Russian authorities and confessed to money laundering and hacker attacks in March and April 2018.

In July 2018, the Paris prosecutor’s office accused Vinnik of extortion, money laundering and computer fraud, and French authorities issued a European arrest warrant. The Greek court chose to extradite Vinnik to France at the start of this year, where his trial began in September.

The Paris prosecutor’s office initially demanded a sentence of 10 years and a fine of €750,000 ($910,000), but of the 14 charges originally brought against Vinnik, all but one were dropped, according to Vinnik’s defence lawyer Frédéric Bélot.

One of the charges eventually dropped was the accusation of Vinnik’s involvement in the Locky cyberattacks. Locky is a malicious software which, once delivered by email, encrypts the data on a computer and demands a ransom in Bitcoin. 200 individuals and companies in France were affected by the virus according to the French investigation, but Vinnik stated at the trial that he had nothing to do with it.

Vinnik also denied having a leadership role in the BTC-e exchange, claiming to be merely a technical consultant, despite reportedly receiving a salary of €10,000 ($12,000) per month. The exchange suspended operations after Vinnik’s arrest, and the site’s servers located in the US were seized by the FBI.

The defence has 10 days to appeal the verdict, which Bélot said they will “most likely” do in the near future. Vinnik is currently being held at La Santé Prison in Paris where, due to coronavirus restrictions, he is in solitary confinement, only allowed visits by his lawyers and an Orthodox priest.