Bitcoin’s role in the Mueller investigation

Matt Raebel

Matt Raebel

Associate Editor

What do the investigation by FBI special counsel Robert Mueller and bitcoin have in common? Potentially, they’re both connected to a Russian hacker named Alexander Vinnik.

The crypto world is lousy with individuals who have criminal records, in addition to all the criminals who haven’t been caught yet. Among those in the former is Alexander Vinnik, a Russian programmer affiliated with the bitcoin (BTC) exchange BTC-e, which has been indicted by a grand jury of the Northern District of California for operating an unlicensed money service business, as well as helping cybercriminals by laundering up to $9 billion worth of money using bitcoin. It was also the first and only crypto exchange found to have had a direct connection to the 2014 hacking attacks against the bitcoin exchange Mt. Gox, one of the first and worst cyber attacks in crypto history. That attack cost bitcoin holders tens of millions of dollars worth of digital assets. If you compare bitcoin’s prices in 2014 to its current prices, that amount has now increased tenfold despite the massive price decreases in bitcoin and altcoins this year.

Vinnik was arrested while vacationing with his family in Greece in 2017. Since then, government agencies from the U.S., France, Greece, and Russia have been locked in a legal battle for the right to extradite him, or in Greece’s case, put him on trial. The U.S. government (which includes the U.S. Secret Service, the IRS, the FBI, and even ICE) claims that Vinnik must stand trial in the U.S., because many of the victims of criminal activity linked to BTC-e were Americans. France has made similar claims. The Russian government has remained firm in its stance that since Vinnik is a Russian national, he must stand trial in Russia. In September, the Supreme Court of Greece ruled in favor of Vinnik’s extradition to Russia, although according to the Russian news company TASS, in late November the supreme court of Greece was in the process of discussing Vinnik’s extradition to France instead. Recently, Vinnik’s lawyers announced that he had gone on a hunger strike to protest Western extradition.

Since he was caught, Vinnik has insisted that he is innocent of any wrongdoing. He claims that he was not involved with criminal activity, that his role at the exchange was largely technical, and that he was not the one supervising the exchange. Despite this, he has become the focal point of a battle between four sovereign nations for over a year. He has even been the target of at least one assassination attempt while in prison, which Greek authorities thwarted. He has also been linked to hacking attacks against other exchanges including Bitcoinica and Bitfloor. Beyond that, the data firm Elliptic has found evidence that implicates Vinnik as playing a role in the attempts by Russian agents to influence the 2016 elections.

According to Elliptic, some of the bitcoins used to launder money with BTC-e were linked to “Fancy Bear,” a hacking unit believed to be under the direct supervision of Russian military intelligence. That same unit has been accused by special counsel Mueller of stealing emails from officials of the United States Democratic party in order to influence the election. Based on this connection, it is possible that Vinnik may have some information that could aid in the FBI investigation on Russia’s 2016 cyber attacks against the U.S.

Of course, if Vinnik is extradited to his native Russia, it won’t matter what he knows; as hard as the Russian government has been fighting to keep Vinnik out of Western hands, it’s quite unlikely they will share any information learned from Vinnik regarding an investigation on hostile actions by Russian government officials. Whatever Vinnik knows, apparently it’s worth killing for.

John Lothian Newsletter

Today's Newsletter

We visit more than 100 websites daily for financial news (Would YOU do that?)

Now Read This

Bcause LLC ordered into liquidation

U.S. Federal Bankruptcy Court Judge Janet Baer converted Bcause’s long six-month long  Chapter 11 bankruptcy proceeding into a Chapter 7 bankruptcy under which the company will be liquidated. The U.S. Trustee has been asked to assign a trustee...

Anchorage running Libra test nodes and other highlights from the Digital Asset Summit

After the close of the first day of the Voice of Blockchain conference in Chicago on Monday, dozens gathered on the tenth floor of the venue for a Digital Asset Summit hosted by FinTank, a fintech development hub based in Chicago, as well as Fidelity Digital Assets, Galaxy Digital, and Token Daily. It was a closed event unaffiliated with the Voice of Blockchain conference, though many attendees from VoB were there.

The CMW Podcast Episode 4: Evolving With the Market

Why did Scott Freeman go from being a managing partner at a quantitative hedge fund to starting a company for digital asset trading and advisory services? Scott answers this and other fascinating questions about pivoting into institutional crypto trading, navigating through the regulatory nuances between different markets around the world, and more.

Pin It on Pinterest

Share This