#FINTECH
JULY 26, 2017 / 7:28 AM / 3 HOURS AGO
Greece arrests Russian suspected of running $4 billion bitcoin laundering ring
Karolina Tagaris , Jack Stubbs and Anna Irrera
4 MIN READ
Alexander Vinnik, a 38 year old Russian man (2nd L) suspected of running a money laundering operation, is escorted by plain-clothes police officers to a court in Thessaloniki, Greece July 26, 2017.
Alexandros Avramidis
ATHENS/MOSCOW/NEW YORK (Reuters) - A Russian man suspected of being the anonymous mastermind behind one of the world's oldest crypto-currency exchanges and of laundering at least $4 billion has been arrested in Greece, police and sources said on Wednesday.
Police sources identified him as Alexander Vinnik, 38, who was arrested after a tip-off in a small beachside village in northern Greece on a U.S. warrant. Police said the United States would seek to extradite him.
Two sources close to the BTC-e virtual currency exchange, who declined to be identified while the case was open, said Vinnik was a key person behind the platform, which has been offline since reporting "technical problems" late on Tuesday.
"An internationally sought 'mastermind' of a crime organization has been arrested" Greek police said in a statement. "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."
Police said "at least" $4 billion in cash had been laundered through a bitcoin platform since 2011 - the year BTC-e was founded - with 7 million bitcoins deposited, and 5.5 million bitcoins in withdrawals.
Bitcoin was the first digital currency to successfully use cryptography to keep transactions secure and pseudonymous, making conventional financial regulation difficult.
Vinnik's arrest is the latest in a series of U.S. operations against Russian cyber criminals in Europe. Last week, the U.S. Justice Department moved to shut down the dark web marketplace AlphaBay.
Alexander Vinnik, a 38 year old Russian man (L) suspected of running a money laundering operation, is escorted by a plain-clothes police officer to a court in Thessaloniki, Greece July 26, 2017.
Alexandros Avramidis
The U.S. prosecutions coincide with intensified scrutiny of Russian hackers after U.S. intelligence officials determined that Russia interfered in the 2016 U.S. presidential election using cyber warfare methods to help Donald Trump, something Moscow denies.
There was no indication Vinnik's case was connected to the U.S. hacking charges. The U.S. Department of Justice, the Russian Foreign Ministry and BTC-e did not immediately respond to requests for comment.
Founded in 2011, BTC-e is one of the oldest and most obscure virtual currency exchanges, allowing users to trade bitcoin pseudonymously against fiat currencies, such as the U.S. dollar, and other virtual currencies. Until today, the people behind it had remained unknown.
Alexander Vinnik, a 38 year old Russian man (C) suspected of running a money laundering operation, is escorted by plain-clothes police officers to a court in Thessaloniki, Greece July 26, 2017.
Alexandros Avramidis
It is known in crypto-currency markets as one with the most relaxed standards for checking the identity of its users to combat money laundering, and for not collaborating with law enforcement.
This helped make BTC-e "a favorite money-laundering location," said James Smith, chief executive of Elliptic, a company that works with law enforcement to track illicit bitcoin transactions. The exchange has been connected to recent ransomware attacks, he said.
BTC-e has been out of service for over 24 hours for what it described as "unplanned maintenance." In a tweet on Wednesday after the arrest, BTC-e said it would restore service in the next 5-10 days.
While bitcoins can be bought and spent anonymously using digital wallets with unique addresses, transactions are recorded on a public ledger called blockchain, making it possible to follow the coins.
Over the years, law enforcement agencies around the world have been able to identify users behind pseudonymous wallets connected to illegal activities by tracking bitcoin movements, often with the help of exchanges and security firms like Elliptic.
https://www.reuters.com/article/us-gree ... SKBN1AB1OP
Bitcoin exchange chief arrested amid new questions about Mt Gox theft
by Russell Brandom@russellbrandom Jul 26, 2017, 2:00pm EDT
Greek police have arrested one of the central figures in the Bitcoin exchange BTC-e on suspicion of money laundering. Russian citizen Alexander Vinnik was arrested in Greece at the request of US law enforcement, according to a Reuters report. The report cites two sources close to BTC-e who describe Vinnik as “a key person behind the platform.”
The BTC-e exchange has long been a favorite of criminals, as its headquarters in Russia places it outside the reach of US and European law enforcement. Recent Google research found that 95 percent of ransomware cash-outs occurred through the BTC-e exchange, although it’s unclear whether the exchange itself would be liable for those payments.
Those payments have made BTC-e one of the largest bitcoin exchanges, regularly handling more than 3 percent of total Bitcoin transactions. The exchange has been down since Tuesday evening.
“OUR CHIEF SUSPECT FOR INVOLVEMENT IN THE MT GOX THEFT”
The charges against Vinnik are still sealed, and are likely to remain sealed as prosecutors attempt to extradite him to the US. However, law enforcement officials indicated that as much as $4 billion is suspected to have been laundered through the platform.
Some analysts also believe Vinnik is connected the massive theft that brought down the Mt Gox bitcoin exchange in 2014. In a report released shortly after the arrest, the security firm Wizsec described Vinnik as “our chief suspect for involvement in the Mt Gox theft (or the laundering of the proceeds thereof).” Analyzing transactions on the blockchain, the group claims to have seen the proceeds from several high-profile Bitcoin thefts pass through wallets listed under Vinnik’s name.
Mt Gox was the most popular exchange of early Bitcoin users, until it was revealed to be catastrophically insolvent as a result of a long-running theft, which made off with as much as $400 million in bitcoin. The culprit has never been identified, and has remained a subject of intense speculation throughout the bitcoin community.
Previous analysis of the theft indicated the crucial compromise occurred as early as 2011, with subsequent withdrawals going unnoticed until years afterward. BTC-e was founded in July 2011.
https://www.theverge.com/2017/7/26/1603 ... ft-suspect
checking to see if this is the same guy
Russian jailed for rival's murder
Sergei Yushenkov
Yushenkov was shot outside his apartment block
A Russian politician has been jailed for 20 years for ordering the murder of a rival, Russian news agencies report.
Mikhail Kodanev was convicted two weeks ago of paying for the death of Sergei Yushenkov, 52.
The murder was one of Russia's highest-profile political killings for years.
The men were part of rival factions of the Liberal Russia Party, founded by now exiled tycoon Boris Berezovsky. Kodanev led a breakaway faction backed by Mr Berezovsky.
Kodanev killed Mr Yushenkov to take control of party funding, the court heard, paying $60,000 for the contract killing.
Boris Berezovsky
Berezovsky backed faction led by Kodanev
Mr Yuskenkov was gunned down outside his apartment block in Moscow in April 2003.
The gunman, Alexander Kulachinsky, was convicted of murder and jailed for 20 years.
The Liberal Russia Party, set up to rival President Vladimir Putin, was seen as having little political weight even before the murder.
Two other men convicted of helping organise the murder, Alexander Vinnik and Igor Kiselyev were sentenced to 10 and 11 years each respectively.
Mr Berezovsky, a close associate of Kodanev, accuses Russian authorities of organising the murder.
Mr Yushenkov was the second leader of Liberal Russia to be murdered in less than a year. Another co-chairman, Vladimir Golovlyov, was shot dead in August 2002.
