Suspected BTC-e mastermind, Alexander Vinnik, was arrested on Wednesday whilst vacationing with his partner in Northern Greece. The 38-year-old Russian is suspected of directing a criminal organization accused of laundering over $4 billion through BTC-e since 2011. Accusations of Vinnik’s involvement in laundering bitcoins that were stolen during the devastating hack that resulted in Mt.Gox’s insolvency are also mounting.
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A 38-year-old Russian man has been arrested in Northern Greece for his suspected role in the operation of the shadowy bitcoin exchange BTC-e. The man, Alexander Vinnik, is accused of having facilitated the laundering of over $4 billion worth of bitcoin since 2011. Vinnik is currently in the custody of the Thessaloniki Court of Appeals, pending an application for his extradition to the United States to commence.
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The arrest was carried out by Greek authorities working in partnership with US agencies. The FBI had been surveilling Vinnik for over a year, as documents pertaining to his arrest make reference to a Webmoney account that was accessed from a luxury Abu Dhabi hotel in May 2016. Electronic equipment is reported to have been seized from his hotel room.
Evidence Is Compiling Linking Vinnik to the Mt.Gox Hack That Saw $2.1 Billion Worth of Customers’ Bitcoin Stolen
Greek have police made an official statement regarding the arrest, stating that “an internationally sought ‘mastermind’ of a crime organization has been arrested. Since 2011 the 38-year-old has been running a criminal organization which administers one of the most important websites of electronic crime in the world.” The US Department of Justice has described BTC-e as “one of the largest entities in the field of electronic money laundering and money laundering in the world”, stating that the company’s “illegal proceeds come from a number of high-level piracy, ransom repayment systems, drug trafficking and tax systems”.
Evidence is also compiling that links Vinnik to the infamous of Mt.Gox hack that saw approximately $2.1 billion worth of customers’ bitcoin stolen. Wizsec claims that approximately 300,000 bitcoin stolen in the hack was laundered via BTC-e. Crucially, their reports suggest that many of the stolen bitcoins were immediately moved from wallets owned by Vinnik to BTC-e internal storage, rather than customer deposit wallets. Similar patterns have also been identified in the circulation of bitcoin “stolen from Bitcoinica, Bitfloor and several other thefts from back in 2011 and 2012.”
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