Shalini Nagarajan

Russian citizen Alexander Vinnik, currently facing money laundering charges in the US, is leading a campaign to be included in a prisoner exchange agreement between his home country and the US.&nbsp;



Part of the aim of this exchange is to secure the release of Wall Street Journal reporter Evan Gershkovich, who is currently detained in Russia for alleged espionage.



In 2017, Vinnik was <a href="https://www.justice.gov/usao-ndca/pr/russian-national-and-bitcoin-exchange-charged-21-count-indictment-operating-alleged" target="_blank" rel="noreferrer noopener">charged</a> with a 21-count indictment, alleging that he laundered over $4 billion worth of bitcoin through crypto exchange BTC-e. The Department of Justice claimed that he also obtained funds from the Mt. Gox hack and proceeded to launder them through various exchanges.



In a notable development first <a href="https://www.wsj.com/articles/russian-indicted-in-u-s-lobbies-for-freedom-through-a-prisoner-swap-8b15b7c8" target="_blank" rel="noreferrer noopener">reported</a> by the Wall Street Journal on Wednesday, Vinnik&#8217;s counsel outlined his intentions in federal court filings in California on May 19.



His lawyers are looking to modify a protective order in his case so that he can publicly push for a prisoner swap.



“Mr. Vinnik should be permitted to use discovery that is indisputably non-sensitive to answer the accusations against him and advocate publicly for his inclusion in a prisoner swap,” David Rizk, assistant federal public defender, wrote in a court filing.



Rizk referred to the <a href="https://www.theguardian.com/world/2022/dec/08/brittney-griner-russia-us-prisoner-swap-viktor-bout" target="_blank" rel="noreferrer noopener">case</a> of Russian arms trafficker Viktor Bout, who was freed in Dec. 2022 in exchange for US basketball star Brittney Griner, as an example to support his request.



In March, WSJ’s Gershkovich was detained in Russia on allegations of trying to obtain classified defense information for the US government. The reporter firmly denies any wrongdoing. Notably, his arrest is significant as it is the first time since the Soviet era that Moscow has accused a US journalist of espionage.



Rizk added that sources familiar with prisoner swap negotiations have advised defense counsel to advocate publicly for Vinnik’s inclusion in a trade, as doing so would increase the likelihood of a successful exchange.



“Discussion between the two countries are ongoing,” he said in relation to a possible prisoner swap.



<h2 class="wp-block-heading">Vinnik refuses to accept US charges</h2>



Vinnik is also accused of being involved in identity theft, aiding drug trafficking and playing a role in laundering criminal proceeds from global syndicates.



He was <a href="https://www.occrp.org/en/daily/13495-france-sentences-russian-crypto-launderer-to-five-years-jail" target="_blank" rel="noreferrer noopener">taken into custody</a> in Greece in 2017 due to a US warrant, and <a href="https://blockworks.co/news/alleged-bitcoin-launderer-extradited-to-us-after-5-years-in-jail">extradited to the US</a> in August 2022. Vinnik has maintained his innocence, pleading not guilty to the charges brought against him in the US and denying he had any decision-making powers over the exchange. 



Vinnik’s French lawyer Frédéric Bélot began requesting Russia <a href="https://blockworks.co/news/alleged-bitcoin-launderers-lawyer-seeks-prisoner-swap-russia">to facilitate a prisoner swap deal</a> with the US last year. In a letter seen by Blockworks dated Sept. 5, Bélot told Russia’s Foreign Minister Sergei Lavrov that the “only thing that can save Alexander” is Russian negotiations with the US.



“He is ready to stand trial in Russia as he is counting on his country&#8217;s justice,” the lawyer added.



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alexander vinnik

Lawyers For Accused Russian Bitcoin Launderer Seek Prisoner Swap for WSJ Journalist

<div id="highlights-block_63171b986e256" class="highlights">
 <ul>
 <li>Vinnik’s psychiatrists said he has partial loss of memory due to the stress of isolation</li>
 <li>He faces 55 years in prison, which the lawyer said equals a life sentence</li>
 </ul>
 
</div>



Alexander Vinnik, the purported bitcoin launder who was recently <a href="https://cms.blockworks.co/alleged-bitcoin-launderer-extradited-to-us-after-5-years-in-jail/" target="_blank" rel="noreferrer noopener">extradited to the US</a> after more than five years of litigation, is trying to find a way back home to Russia.



His French lawyer Frédéric Bélot requested Russia to mediate a deal with the US that involves releasing Vinnik as part of a prisoner swap.



Bélot wrote in a letter seen by Blockworks that the “only thing that can save Alexander” is Russian negotiations with the US. The letter, addressed to Foreign Minister Sergei Lavrov, details his client’s journey from pre-trial detention to extradition arrest.



<a href="https://www.reuters.com/world/europe/lawyer-alleged-crypto-launderer-urges-russia-discuss-prisoner-swap-letter-2022-09-05/">Reuters</a> first reported the news on Tuesday.



Bélot’s request comes about a month after US Secretary of State Anthony Blinken said Washington made a “<a href="https://www.reuters.com/world/us/blinken-says-he-will-press-lavrov-us-proposal-bring-home-griner-whelan-2022-07-27/" target="_blank" rel="noreferrer noopener">substantial offer</a>” to Russia to release US citizens held there. Blinken’s offer pertained to WNBA star Brittney Griner and former US marine Paul Whelan, who are detained in Moscow on <a href="https://www.wionews.com/photos/from-brittney-griner-to-paul-whelan-who-are-the-americans-held-captive-abroad-501598#russia-501596" target="_blank" rel="noreferrer noopener">separate charges</a>.



Vinnik was <a href="https://www.justice.gov/usao-ndca/pr/russian-national-and-bitcoin-exchange-charged-21-count-indictment-operating-alleged">charged</a> in 2017 under a 21-count indictment for allegedly laundering over $4 billion of bitcoin through his crypto exchange BTC-e. The Department of Justice said he also obtained funds from the Mt. Gox hack and laundered those through various exchanges.&nbsp;



Chief Don Fort of the Internal Revenue Service’s Criminal Investigation said Vinnik “stole identities, facilitated drug trafficking, and helped to launder criminal proceeds from syndicates around the world.”



He was subsequently <a href="https://www.occrp.org/en/daily/13495-france-sentences-russian-crypto-launderer-to-five-years-jail" target="_blank" rel="noreferrer noopener">arrested</a> in Greece at the US’ request that year while he was at a beachside village with his family. The US, France and Russia had fought for his extradition —&nbsp;and in 2020 he eventually moved to prison in France.



He was then briefly sent back to Athens, from where he was extradited to the US last month. The lawyer told Blockworks in an email at the time that he would continue to defend Vinnik alongside American counsel.



<h3 class="wp-block-heading">Vinnik denies he laundered bitcoin</h3>



Vinnik has never accepted the allegations he’s been charged with, and his lawyer says he continues to deny all charges against him.&nbsp;



Notably, the lawyer’s letter stated that Vinnik’s prison term in France was stressful — with psychiatrists determining he faced an episodic loss of memory. The lawyer also stated that Vinnik’s wife, Alexandra, died in November 2020 at the age of 34 after she underwent six surgeries for an unspecified illness.&nbsp;&nbsp;



Vinnik had requested French authorities permission to travel to Russia for his wife’s funeral, but that was “firmly rejected,” the lawyer said.



The letter further notes Vinnik’s children have stopped asking when he will return home as the separation has been extensive.



He faces a maximum penalty of 55 years on charges of operating an unlicensed money service business, conspiracy to commit money laundering and engaging in unlawful monetary transactions. Bélot described the term as equal to a life sentence.



The Russian foreign ministry didn’t return Blockworks’ request for comment by press time.



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Alleged Bitcoin Launderer’s Lawyer Seeks Prisoner Swap With Russia

<div id="highlights-block_62ece8f513e8b" class="highlights">
 <ul>
 <li>The US charged Vinnik and defunct crypto exchange BTC-e in 2017 over illegal profits</li>
 <li>He&#8217;s alleged to have played a role in laundering bitcoin stolen in the Mt. Gox hack</li>
 </ul>
 
</div>



Alleged bitcoin launderer Alexander Vinnik has been extradited to the US, some five years after his initial indictment.



Vinnik, a Russian national, was the alleged operator of defunct cryptocurrency exchange BTC-e. He left Greece on Thursday after facing arrest in several countries.



“Alexander was transferred from Paris to Athens yesterday in the early afternoon,” his French lawyer Frédéric Bélot told Blockworks in an emailed statement on Friday. “Then he was transferred from Athens to Boston (to refuel) and he arrived in San Francisco during the night.”



The lawyer added that he would continue to defend Vinnik alongside American counsel. Vinnik faces up to 55 years in US prison.



<a href="https://edition.cnn.com/2022/08/04/politics/russian-bitcoin-extradited-us/index.html" target="_blank" rel="noreferrer noopener">CNN</a>, which first reported the development, said Vinnik is expected to appear in court in the Northern District of California. The report didn’t mention a date of appearance.



Vinnik was <a href="https://www.justice.gov/usao-ndca/pr/russian-national-and-bitcoin-exchange-charged-21-count-indictment-operating-alleged" target="_blank" rel="noreferrer noopener">charged</a> in 2017 for operating an unlicensed money service business and alleged money laundering. The Department of Justice accused him of a long list of crimes including stealing identities, enabling drug trafficking and helping to launder criminal proceeds.&nbsp;



He was <a href="https://www.occrp.org/en/daily/13495-france-sentences-russian-crypto-launderer-to-five-years-jail" target="_blank" rel="noreferrer noopener">arrested</a> in Greece at the US’ request that year while on a family vacation. The US, France and Russia have battled over his extradition ever since.



France was successful in 2020, where Vinnik faced five years in prison for alleged money laundering. More recently, the US <a href="https://www.coindesk.com/business/2022/07/22/us-calls-off-extradition-request-for-btc-e-operator-alexander-vinnik/" target="_blank" rel="noreferrer noopener">reportedly</a> called off its own extradition request. But his lawyer suggested that was a distraction trick aimed at expediting the process through Greece — where Vinnik was initially arrested.



<h3 class="wp-block-heading">Vinnik believes he&#8217;s not a bitcoin launderer</h3>



Vinnik, via BTC-e, is said to have handled some of the <a href="https://www.theverge.com/2017/7/29/16060344/btce-bitcoin-exchange-takedown-mt-gox-theft-law-enforcement" target="_blank" rel="noreferrer noopener">530,000 bitcoin</a> (around $9 million back then, nearly $13 billion today) stolen from Mt. Gox, where he allegedly served as the platform&#8217;s administrator. 



He told <a href="https://russian.rt.com/world/article/427168-vinnik-bitcoin-rossiya-ssha-interviyu" target="_blank" rel="noreferrer noopener">Russia Today</a> in 2017 that he didn’t consider himself guilty. According to him, the US had no right to judge a Russian citizen.



His wife told the same outlet she was convinced the US was after him for his “<a href="https://www.rt.com/news/402462-vinnik-wife-interview-extradition/" target="_blank" rel="noreferrer noopener">intellectual abilities</a>,” and denied he ever ran BTC-e.



BTC-e was founded in 2011 and allowed trading between the US dollar, Russian ruble, some European currencies, bitcoin, litecoin and ether. 



The exchange, which shut shop in 2017 after a 21-count indictment, received over $4 billion in bitcoin during its operation, according to the US Department of Justice.&nbsp;



The Financial Crimes Enforcement Network imposed a $110 million fine on BTC-e and a $12 million fine against Vinnik for their role in the violations in 2017.



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