In December 2019, we reported that a Greek court had turned down an extradition request for Alexander Vinnik to be extradited to Russia. Instead, the authorities have chosen to have him extradited to France. Alexander is accused of laundering over $4 billion via BTC-e. The exchange has been described as being a showy crypto brokerage that was serving hundreds of thousands at its height.
His Arrest
Vinnik was arrested in Greece in July 2017 by Greek authorities and was accused of running a major international money-laundering scheme. According to a Tass News Agency report, Vinnik is already in a Parisian hospital.
His arrest in Greece came after a request by US authorities. The US accuses Vinnik of helping to launder billions of dollars via the BTC-e exchange. Besides that, he is wanted in France and Russia under similar charges. Russia had requested that he be sent back to his country of origin but the request was turned down.
Claims of Unfair Treatment
According to his lawyer, Vinnik is being mistreated. In a Facebook post, she claims that Vinnik was illegally abducted and sent to France. She claims his health is deteriorating. This is because Vinnik has been on a hunger strike. The lawyer also criticized Greece for not keeping its promise to have him extradited to Russia instead of France. The most likely scenario is that Vinnik is going to end up in the US once France is done with him.
The Rise of BTC-e Cryptocurrency Exchange
According to a comprehensive Global Witness report, BTC-e was created in 2011. Initially, it was a small exchange and it had about 20,000 users by the end of 2012. However, once MT. Gox collapsed, the exchange surged. By 2014, the exchange had about 570,000 users. About 20% of those users were Russian.
The exchange was experiencing serious volumes. For instance, in October 2014, the exchange had about 79,114 BTC, which is worth about $700 million today. By autumn 2016, the exchange was responsible for about 15% of all USD/BTC transactions. This made it the third-largest crypto exchange globally. Before Vinnik was arrested, BTC-e had appeared in various international publications such as The Wall Street Journal, Financial Times, and TIME.
Lack of Regulation
Signs that BTC-e was a problematic exchange had already begun to emerge as far back as 2013. According to a Wired report from back then, BTC-e was not implementing AML rules. It might have been a major reason why criminals chose to use the exchange. The report classified BTC-e as an offshore exchange.
Clamping down on Illegal Activities
The US and many other nations have been taking the issue of crime in the crypto sector quite seriously in the recent past. This has resulted in numerous arrests and prosecutions. Many other cases are still under investigation. Once France is done with Vinnik, he will likely be sent to the US to face prosecution. In general, this is a sign that authorities globally are working together to stamp out illegal activities in the crypto sector.
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