Published: Fri, July 28, 2017
Health Care | By Jeffery Armstrong

Bitcoin fraud suspect Vinnik charged by USA grand jury

Bitcoin fraud suspect Vinnik charged by USA grand jury

A US jury indicted a Russian man on Wednesday as the operator of a digital currency exchange he allegedly used to launder more than $4 billion for people involved in crimes ranging from computer hacking to drug trafficking.

Get exclusive analysis of bitcoin and learn from our trading tutorials. In just under three years, almost 630,000 BTC had been stolen from MtGox by a hacker - this major hack is suspected to have been in connection with Mr. Vinnik himself, who maintains a key place in the overall situation. Vinnik was arrested earlier today in Greece on a US warrant. The warrant relates to running a criminal organization that, since 2011, has laundered billions. He is suspected of heading a criminal organization since 2011 that "owns, operates and manages one of the world's leading e-crime websites", according to a police statement. FinCEN said that it has also identified at least $3 million of facilitated transactions tied to ransomware attacks such as "Cryptolocker" (at least $800,000) and "Locky" (over 6,500 bitcoin).

Vinnik was cuffed in possession of two laptops, two tablet computers, mobile phones, a router, a camera, plus four credit cards, all of which were seized.

Since launching in 2011, BTC-e received more than $4 billion worth of bitcoin, much of it the proceeds of crimes such as hacks, ransomware scams and drug rings, says the DoJ.

In February, the Russian Foreign Ministry said that the United States has continued its "unacceptable" practice of "hunting" Russians globally despite efforts to establish cooperation in extraditions.

It is not clear exactly what Vinnik's role was within what was once the largest exchange platform for digital currencies due to the secrecy and lack of disclosures made about who actually was behind the site.

Earlier, the BTC-E's representatives informed that the exchange undergoes unplanned maintenance, citing data center issues as the reason for the outage. The exchange's engineers quickly started working on the problem but, so far, the exchange is still down.

BTC-e is said to have "embraced the pervasive criminal activity conducted at the exchange" by obtaining sparse accounts of customer identities, limited to email addresses, passwords, and usernames. No movement of the coins held within BTC-e's wallets has been confirmed.

Users were also quick to point out a Forbes article about Google warning about the recent ransomware boom, as it netted criminals about $2 million a year. In total some 300,000 BTC ended up on BTC-e, while other coins were deposited to other exchanges, including MtGox itself.

Featured image from Shutterstock.

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