Perhaps, the most dramatic way President Trump has expressed his support for the digital asset industry is by freeing crypto crime lords like Ross Ulbricht. Trump Bitcoin exchange BTC-e Alexander Vinnik in a prisoner swap with Russia on Wednesday.
But, who is Alexander Vinnik and what landed him in prison in the first place? Here’s everything you need to know about the infamous Bitcoin criminal.
Who is Alexander Vinnik?
Vinnik is a 45-year-old Russian national and IT specialist. He became a target of U.S. law enforcement for his involvement in operating BTC-e, a bitcoin trading platform that the Justice Department claims was one of the primary ways cyber criminals “transferred, laundered, and stored the criminal proceeds of their illegal activities.”
He is also accused of being one of the hackers behind the 2014 collapse of Mt. Gox, stealing as much as 80,000 Bitcoins from one of the largest crypto exchanges at the time.
What was he charged with?
Vinnik was originally arrested in 2017 in a beachside town in Greece at the request of the U.S., which alleged that he was responsible for aiding cyber criminals in laundering $4 billion dollars between 2011 and 2017 using Bitcoin and other cryptocurrencies. In 2020, he was extradited to France, where he was convicted and sentenced to 5 years in prison for money laundering. And in 2022, he was finally brought to the U.S. where he was charged with conspiracy to commit money laundering.
Last year, Vinnik pleaded guilty to those charges and faced up to 20 years in prison. He was scheduled to be sentenced in January of this year but in November, a federal judge agreed to postpone the sentencing until June without a clear explanation for the delay.
What was BTC-e and what was it used for?
BTC-e was created in 2011 as a means to trade Bitcoin against the U.S. dollar or other digital currencies. It was known for its lax anti-money laundering and know-your-customer rules, and quickly became one of the largest and most widely-used crypto exchanges.
While BTC-e operated inside of Russia, many of its customers were in the U.S, capturing the attention of law enforcement agencies like the FBI and Homeland Security. The platform served over a million customers worldwide, the Justice Department said in a statement, and helped facilitate “computer intrusions and hacking incidents, ransomware attacks, identity theft schemes, corrupt public officials, and narcotics distribution rings.” The statement also alleged that Vinnik intentionally used BTC-e to promote these illegal activities.
The U.S. government shut down the website in 2017 after Vinnik was arrested and seized the exchange’s assets.
What did the U.S. get in return for releasing Vinnik?
The U.S. traded Vinnik for American school teacher Marc Fogel, who had been detained in Russia since 2021 and sentenced to 14 years in prison on charges related to marijuana. The trade comes as Trump tries to set the stage for further negotiations with Russia. A U.S. official said the swap was a sign of good faith from Russia and that “we are moving in the right direction to end the brutal and terrible war in Ukraine.”
