Recently Arrested, Alexander Vinnik Suspected of Ties to MtGox Theft

A recent arrest of Russian national Alexander Vinnik today by Greek police may be more significant than initially thought. The alleged operator of cryptocurrency Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term BTC-e was also revealed to be a chief suspect of involvement in the former MtGox theft, which roiled the industry some years ago, according to a recent report.

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Earlier today, Finance Magnates covered the arrest of Mr. Vinnik, who was apprehended on suspicion of running a $4 billion money laundering operation related to illicit business activities with Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term. 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.

The arrest also coincided with the blackout of BTC-e, which has been 'under maintenance' for over 24 hours. This has caused many of its users to express fears that the platform had been hacked. Interestingly, the exchange has remained one of the most mercurial in the industry, disclosing very little public information about its operations or its operators – BTC-e is one of the most established or longest lasting exchanges, boasting a large base of customers.

The plot thickens

Mr. Vinnik has apparently been under investigation for years by a group of bitcoin security specialists, following prior investigations into MtGox. To date, the events surrounding MtGox constitue the largest theft in the cryptocurrency industry – originally, MtGox hot wallet private keys were stolen, facilitating access to a large number of bitcoins.

During this same period, a number of wallets controlled by Mr. Vinnik were receiving a stream of coins using the aforementioned compromised keys for nearly two years. In just under three years, nearly 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.

Interestingly, many of these coins that made their way into Mr. Vinnik's wallets were also eventually bound for BTC-e, and consequently sold off or laundered. A recent report suggests that upwards of 300,000 BTC ended up on BTC-e, though other coins were deposited to other exchanges. The nature of the movements also seem to point to Mr. Vinnik’s involvement, namely with BTC-e.

To further complicate matters, additional coins stolen from Bitcoinica, Bitfloor, and others between 2011 and 2012 were all apparently laundered via the same wallets that the MtGox theft was tied to. It will be interesting to see what a more lengthy analysis yields, especially with so many question markets surrounding money-laundering episodes over the past few years.