Alexander Vinnick , the Russian creator of Bitcoin exchange platform BTC-e , has been sentenced to five years in prison for money laundering .
A Paris court found Vinnick guilty of money laundering and fined him 100,000 euros ($121,000). Vinnick was arrested in Greece in 2017 on an international warrant issued by the U.S. Department of Justice and extradited to France earlier this year.
The Justice Department accused Vinnick of operating the BTC-e platform as a front for a massive money laundering operation that received stolen funds from cyberattacks . Earlier, security firm Wizsec had linked his private BTC-e accounts to funds stolen from Mt. Gox . In that case, about $480 million worth of Bitcoin disappeared from the exchange in 2014 due to what Mt. Gox CEO Mark Karpeles called “system weaknesses . ”
The US DOJ has charged Vinnick with 17 counts of money laundering amounting to $4 billion since the trading platform was founded in 2011. Meanwhile, French prosecutors have charged him with “extortion, conspiracy and damage to automatic data processing systems.” French authorities believe he helped create the “Locky” ransomware, which was spread via email and used to attack French businesses and organizations between 2016 and 2018. At least 20 entities in the country ended up paying ransoms in Bitcoin to regain control of their networks.
Vinnik's defense argued in court that he was merely a technical operator taking instructions from BTC-e's directors . The court ended up convicting him of money laundering, but that's not as tragic for Vinnick as it could have been. According to ZDNet , French prosecutors were only able to prove one of the 14 charges they brought against him, and it wasn't the one related to Locky. This means he was able to avoid the ten-year sentence and €750,000 fine that prosecutors had originally sought.
