Russian Sentenced to French Prison for Bitcoin Laundering

(Associated Press) A Russian bitcoin expert at the center of a multi-country legal tussle was sentenced in Paris on Monday to five years in prison for money laundering and ordered to pay 100,000 euros (more than $120,000) in fines in a case of suspected cryptocurrency fraud.

A court acquitted Alexander Vinnik of charges of extortion and association with a criminal enterprise, according to his lawyers. Vinnik denies wrongdoing, and his lawyers are discussing whether to appeal.

Vinnik, 41, is also wanted in the United States and Russia. He was accused of being behind a 135 million-euro ($160 million) fraud campaign that used ransomware and the cryptocurrency bitcoin.

French prosecutors say Vinnik was one of the creators of a malicious software called “Locky” that was delivered through email. If downloaded, the recipient’s data was encrypted and they were asked to pay ransom in bitcoin to free it.

A series of such attacks on French businesses and organizations between 2016 and 2018 led to 20 victims paying ransom demands issued in bitcoin, one of the more widely used cryptocurrencies, through BTC-e, one of the world’s largest digital currency exchanges.

At his trial, Vinnik’s main line of defense was that he was only a technical operator carrying out the instructions of BTC-e directors.

The court convicted Vinnik of money laundering but didn’t find enough evidence to convict him of extortion, and stopped short of the 10-year jail term and 750,000 euros in fines that prosecutors had requested.

One of his French lawyers, Ariane Zimra, said his conviction for money laundering “doesn’t make sense,” arguing that cryptocurrency is not legally considered “money.”

Vinnik was arrested while on vacation in Greece and transferred to France earlier this year.