Alexander Vinnik – a Russian man accused of laundering bitcoin funds and for allegedly taking part in multi-million dollar cryptocurrency fraud – has been sentenced to five years in a Paris prison and is also being ordered to pay more than $120,000 in penalties.
Vinnik Ordered to Prison; Will Also Pay Fines
The case involving Vinnik goes back several years. After working at the now defunct cryptocurrency exchange BTC-e, Vinnik was accused of developing a new kind of cryptocurrency malware known as “Locky” that purportedly stole more than $150 million in funds from assorted trading platforms. Soon after the exchange went kaput, Vinnik was arrested while vacationing in Greece.
He was wanted in several countries including France, Russia and the United States for assorted crypto crimes, but ultimately avoided U.S. extradition and was potentially facing trial in France.
Locky was reportedly delivered through email servers. Once it was downloaded from unsuspecting users, it encrypted people’s data and requested bitcoin ransoms in exchange for access to the information. Overall, about 20 separate attacks took place on French businesses between the years of 2016 and 2018, and payments were often requested through BTC-e, the exchange that Vinnik was working for.
The legal defense team supporting Vinnik has consistently made the argument that he was only a technical advisor to the organization and did not take part in any of the fraud. However, it appears a French court has found him guilty of assorted crimes including money laundering, though he has avoided extortion charges, which would have carried a much larger sentence behind them.
Should a guilty verdict have been handed out for that charge, Vinnik could have likely been sentenced to roughly ten years in prison and would have been required to pay more than 750,000 euros. He was also found not guilty for being in “association with a criminal enterprise.” At the time of writing, Vinnik is still denying that he took part in any sort of scheme, and his lawyers are looking to possibly file an appeal in the coming weeks.
Ariane Zimra – one of the lawyers on Vinnik’s behalf – says that the money laundering charge doesn’t work for the case at hand considering that cryptocurrency is not considered legitimate money. Thus, there were no funds to launder.
A Long Legal Battle
Following his arrest in 2018, Vinnik engaged in a hunger strike as a means of protesting the meals and the treatment he was receiving while in police custody. He also faced a civil case filed against him in northern California for more than $100 million. He later had close to $100 million in digital currency funds allegedly taken from him by legal authorities in New Zealand.
The trial for Vinnik lasted close to two months, having begun in the latter part of October.