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Greek Supreme Court Rules to Extradite Alleged BTC-e Owner Alexander Vinnik to Russia

The Supreme Civil and Criminal Court of Greece has ruled to extradite alleged BTC-e owner Alexander Vinnik to Russia to face several cyber fraud charges, Russian state news agency RIA Novosti reports Tuesday, September 4.

The formal decision on extradition to Russia will be issued September 14, coming into force the same day.

During the actual hearing, the Supreme Court will also consider France’s request on the alleged BTC-e owner’s extradition.

According to RIA, Vinnik agreed with his extradition to Russia. “[This case] is now up to politicians and their will,” his attorney Timofey Musatov stated.

The U.S., France, and Russia are currently arguing about the location of Vinnik’s extradition. Several Greek courts have previously ruled in favor of all three countries, with the final decision taken by Greek Minister of Justice.

Vinnik was arrested by Greek police back in July 2017 as the U.S. Department of Justice convicted him of fraud and money laundering around $4 billion worth amount of Bitcoin (BTC).

France later charged Vinnik with “defraud[ing] over 100 people in six French cities between 2016 and 2018”.

In the same time, the Russian government also intervened in the case, asking to extradite the Russian national to his home country. The amount of fraud Vinnik is charged with in Russia is equal to 667,000 rubles (around $9,800), RIA had reported last year.

Days before the final hearing in the Supreme Court, Vinnik’s attorney Makarov accused French prosecutors of trying to question Vinnik without Greek officials’ permission, Cointelegraph reported last week.

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Bitcoin's Price Is Nearing $10K On a Single, Troubled Exchange

Crypto exchange WEX continues to see prices well out of step with the rest of the market amid the continuation of a near-total freeze on withdrawals.

As CoinDesk previously reported, customers of WEX – a kind of successor to the now-defunct cryptocurrency exchange BTC-e – have been on tenterhooks since July 12 as they’ve largely been unable to get outbound payments processed.

The only exceptions have been tether and zcash, and the price disparities suggest that some WEX users are utilizing those tokens as a way out. The normally dollar-tied tether, also known as USDT, is currently above $2 and WEX’s price for zcash (against the US dollar) is $440, or more than double the prevailing rate on the broader market.

Those look to convert their money held on WEX to zcash or tether just to get it out of the exchange must pay a steep price, according to one customer.

“If you buy zcash on Wex, you will have to sell it somewhere else much cheaper, losing up to 50 percent, as the USDT rate is now $2.195 on Wex,” Grigory, a systems administrator from a town in Russia called Ivanovo, told CoinDesk. Further, the ability to make withdrawals has become unavailable again from time to time, he added.

In the absence of word from WEX staff, users have taken to social media and the exchange’s chat box to wonder aloud about the story behind the delay.

Cryptocurrency prices have risen on the site as well, with the value of bitcoin exceeding $9,600 as of press time, or more than $1,400 above the price recorded on CoinDesk’s Bitcoin Price Index (BPI). Prior to the withdrawal issues, prices on the exchange had notably spiked above $9,000.

WEX representatives have not responded to multiple requests for comment.

Waiting game

The situation on WEX has been brewing for more than a week, the exchange’s own statements show.

On July 12, WEX announced on Twitter that withdrawals of fiat and cryptocurrencies were blocked due to the “database migration and other maintenance.”

Later that day, it was said that maintenance had been completed, and some coins, including zcash and tether, were available for withdrawal. But major cryptocurrencies like bitcoin, bitcoin cash, ether, litecoin and dash were to remain unavailable until July 22, according to a post on July 16.

The last public message via Twitter was posted on July 19, saying, “Maintenance has finished successfully.”

However, when July 23 came, exchange customers kept complaining that withdrawals were still blocked.

“No Withdraw is working. It is 23rd now. Maintenance fail can happen, but no information is worst. After BTCe now WEX?” said user @Pete11240362.

“Administrators, if you can’t resolve the problem right now, say: maintenance works in process. Get smart, give some feedback,” demanded Russian-speaking user Sergey Ionkin, who goes by the handle @dear_enman.

Some of the affected users took to Telegram to discuss the situation. One of the groups was promoted and possibly created by Dmitry Vassiliev, an official owner and CEO of WEX, who previously told CoinDesk that he lost control over the exchange due to the intervention of some people he declined to identify.

On Monday, a user in one of the channels claiming he is Dmitry Vassiliev – using two similar usernames, (Dmitry Vasiliev and Dmitry wex.nz) – wrote that he had agreed to register the exchange in the name of the new beneficiaries who are already de facto managing WEX.

The user claimed that the deal is going to take place on Thursday, and promised to reveal the names of those beneficiaries if they don’t fix the situation on that day. Vassiliev stopped answering CoinDesk’s inquiries after a brief exchange on July 12.

No easy ways out

According to Grigori, avenues for actually taking money off the exchange exist – but at a price.

Grigory told CoinDesk he has had 0.1 BTC waiting in limbo on WEX since July 12. He said he started using WEX in the end of 2017 because he liked that the exchange didn’t require ID verification.

For the most of time everything had worked fine, he explained: he had been able to withdraw coins within an hour or less, and fiat-denominated funds would appear in his e-payment account in several hours after the withdrawal transaction.

But that changed earlier this month, he told CoinDesk. The tech support on WEX has provided no reasonable explanation and only recommended waiting until the maintenance is over, Grigory contended.

Fiat withdrawals were ceased in that period, too, though the ability to withdraw funds via so-called WEX codes remained for a time. Users would generate a special code with their accounts and then exchange those codes for fiat currency on specialized websites, which would sent a corresponding amount of dollars or rubles to users’ accounts at Russian payment services like Yandex.Money or Qiwi.

But this is no longer a viable solution, according to Grigory.

“At some point, the offers to buy WEX codes disappeared from those exchange websites as there were enormous numbers of people who wanted to sell them,” he told CoinDesk, adding:

“Now people who wanted to quit at any price have already quit, but the exchange rate is still bad.”

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Court Approves Alleged Bitcoin Money Launder's Extradition to France

A Russian national accused of laundering billions of dollars on the now-defunct crypto exchange BTC-e could soon be extradited to France following a court decision.

Since his arrest last summer, Alexander Vinnik has been at the center of a legal tug-of-war between the governments of Russia, the U.S. and, more recently, France, all of which are seeking to extradite him.

Vinnik, who has maintained no wrongdoing from all charges, had been awaiting a decision from Greek authorities on which country he would ultimately be sent to, though in the past he had expressed a preference for extradition to Russia.

According to the Associated Press, the Greek courts decided Friday that Vinnik would be sent to France in light of accusations of his involvement in cyber attacks against some 100 French nationals. The decision drew swift criticism from the Russian government in wake of the expulsion of two Russian diplomats from Greece just a day prior related to tensions over the entry of Macedonia into the NATO military alliance.

Ilias Spyrliadis, Vinnik’s defense attorney, was reported by the Washington Post as saying that Vinnik will appeal the decision and continue to maintain his innocence from all criminal charges.

Indeed, this is not the first appeal Vinnik has made before Greek authorities, pushing back on the green light offered last December that would have effectively extradited Vinnik to the U.S.

The U.S. government claims Vinnik was the “operator” of BTC-e and utilized the platform to launder some $4 billion over the course of six years. Levying a $110 million fine against the exchange and a $12 million penalty against the Russian national himself, Vinnik would face up to 55 years in prison if convicted in the U.S.

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Greek Court Rules to Extradite Alexander Vinnik, Accused of Laundering $4 Bln in Bitcoin

A Greek court has ruled to extradite the alleged former operator of crypto exchange BTC-e, Alexander Vinnik, to France, local news outlet CNN Greece reported Friday, July 13.

The 39-year old Russian national Vinnik, also known colloquially as “Mr. Bitcoin,” was indicted by U.S. authorities on charges of fraud and money laundering last year, reportedly involving up to $4 billion in Bitcoin (BTC).

Vinnik’s Greek lawyer Ilias Spyrliadis confirmed to Russian news agency TASS that “the court has granted France’s request for Vinnik’s extradition.” Spyrliadis also revealed that he is planning to appeal against the court’s decision in the Greek Supreme Court.

According to CNN Greece, Vinnik himself challenged the decision of the Greek court on extradition to France, denying the allegations of French authorities, who issued a warrant, in which the alleged BTC-e owner was accused of “defraud[ing] over 100 people in six French cities between 2016 and 2018.” Vinnik responded that he was “transferring e-money through a platform,” considering it as “legitimate personal transactions.”

Vinnik’s lawyer Spyrliadis assured Russian BBC that the latest extradition to France would lead to a further extradition to the U.S., because “otherwise the U.S. cannot get him, since the extradition process was blocked.”

The Russia’s Ministry of Foreign Affairs issued a comment July 13 in response to the events, accusing the Greek authorities of “continu[ing] to complicate relations with Russia.” The Ministry of Foreign Affairs claims that Russia’s request to extradite Vinnik should have been given priority over France’s, concluding “[i]t is obvious that Russia cannot leave these actions unanswered.”

On July 25, 2017, Vinnik was arrested by Greek police under the order of of the U.S. Ministry of Justice, following the closure of once major cryptocurrency exchange BTC-e, allegedly owned and administered by Vinnik.

Having publicly stated his innocence in September 2017, Vinnik also denied his involvement in the Mt. Gox hack back in 2011 after a group of Bitcoin security experts claimed that Vinnik had a direct relationship to the incident.

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Something Strange Is Going On at a Crypto Exchange Called WEX

Users of WEX, the cryptocurrency exchange built on the ashes of BTC-e, are reporting withdrawal problems, raising new questions about an already mysterious trading platform.

“‏Dear Wex, when withdraws will enable ??” asked Twitter user Alireza Moosavi on Friday, joining a crowd of Wex customers complaining they couldn’t withdraw their funds for the second day in a row.

Ehsan Mahmoodi similarly inquired, “hello, why withdrawal is disabled?”

A third user, Hasan Gusseynov, asked the exchange, in Russian, “When will everything be ok?”

The user complaints follow odd trading activity observed on the exchange. Earlier this week, CoinDesk reported that the price of bitcoin (against the U.S. dollar) shot up to nearly $9,000 on WEX, while it was still in the $6,000 range practically everywhere else.

Observers say the anomaly could have been due to a number of reasons, from recently-raised fiat withdrawal fees on the exchange to suspicions of insolvency. As of this writing, the USD price of bitcoin on WEX was $7,451, more than $1,200 higher than the price recorded on CoinDesk’s Bitcoin Price Index (BPI).

Stepping back, WEX was launched last year in an apparent effort to resurrect BTC-e, a long-running bitcoin exchange that was targeted and eventually shut down by U.S. and Greek law enforcement officials. A Russian national named Alexander Vinnik was arrested and charged with laundering billions of dollars on BTC-e, and U.S. regulators hit the exchange with a $110 million fine.

Although WEX claimed to be unrelated to BTC-e, its website design and trading pairs were very similar and it was pitched as a service for former BTC-e customers.

Questions aside, posts on social media as well as WEX’s chatbox indicate that the withdrawal problems remain ongoing as of press time, though a note on the exchange’s official Twitter account claimed that user funds are secure.

The developments also follow a string of reports from Russian media outlets detailing the murky background of the exchange, as well as a reported legal effort filed by one of BTC-e’s former users.

Unanswered questions

In a July 12 post on Facebook, Dmitry Vassiliev – who, according to Singapore records obtained by Russian news agency RBK, is listed as the owner of WEX’s operator, World Exchange Services – attributed the price disparities to the actions of Dmitry Sutormin, who he described as a former WEX manager.

Vassiliev explained that Sutormin, a vice president of the Russian Association for Cryptocurrencies and Blockchain and a venture investor in Russia, had been selling a high number of “WEX codes,” which could be redeemed on the exchange for cryptocurrency.

Sutormin “carried out the purchase and sale of WEX codes in any volumes,” Vassiliev explained, “which means that there are a lot of codes on the market … now all those who bought those codes want to buy bitcoin, exchange rate goes up, as very few wish to sell.”

However, talking to CoinDesk via Facebook Messenger, Vassiliev said he’s not sure what Sutormin’s role is now, because, as he admitted, at some point he lost control over the exchange. He would not go into additional specifics.

And when reached via Telegram, Sutormin said that he has no connection with WEX and has never worked there.

“I bought and sold my own codes, I was, in fact, the exchange’s client,” he explained. When asked why he would sell his codes, he said he was “affected by the hype around cryptocurrencies,” adding that it’s a popular business in Moscow.

RBK recently dove into the topic during a long piece on WEX. RBK reporter Andrew Zakharov attempted to conduct such a deal, pretending that he wanted to buy a large amount of bitcoins through a meeting in Moscow and contacting Sutormin who, in turn, connected him to other people for the transfer of money.

Meanwhile, earlier this week, the Russian cryptocurrency website CoinRadio detailed a lawsuit filed by a former BTC-e customer named Pimporn Carty. The website also published a copy of the claims made against WEX.

Carty reportedly sued WEX over funds previously held on BTC-e prior to its collapse, arguing that once she was able to regain access, some of the funds went missing, including more than 11,000 litecoins. While a hearing on the issue was reportedly scheduled for July 12, and referenced in Vassiliev’s Facebook post, it’s unclear whether the meeting took place or, if so, what the outcome was.

Who’s in charge?

Indeed, statements from Vassiliev suggest that it’s not entirely clear who is in charge of WEX at the moment.

RBK also reported that Vassiliev was planning to sell the exchange to Dmitry Khavchenko, a former volunteer fighter in the war in Ukraine and a participant of the militia forces in Crimea that supported the Russian annexation in 2014.

Khavchenko, in turn, told RBK that he was going to move WEX’s office to Crimea and register the managing company in the war-torn region of Ukraine known as Donbass.

According to RBK’s sources, Khavchenko and other people engaged in the conflict in Ukraine are already involved in the exchange’s management, including people connected to Konstantine Malofeev, who has been cited in the press as one of the shadow sponsors of East Ukrainian militants.

WEX denied that the exchange is going to be sold on Twitter, and the exchange did not immediately respond to questions regarding who is in charge or why, exactly, its prices shot up earlier this week.

Image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Bitcoin Price Spikes to Nearly $9K on Little-Known Crypto Exchange

For a cryptocurrency exchange that has seen its bitcoin price trade at a market premium since launch, the spike to nearly $9,000 on the WEX exchange on Wednesday was an outlier.

Some background: in July of last year, U.S. and international law enforcement took aim at BTC-e, the long-running – and long-mysterious – cryptocurrency exchange. In a dramatic turn, a Russian national and one of BTC-e’s suspected employees was arrested and charged with laundering billions of dollars while American regulators moved to slap the exchange with a massive $110 million fine.

In the months since, BTC-e has returned under the WEX banner while Alexander Vinnik has been the subject of a legal tug-of-war between Russia, the U.S. and, now, France, each of which is seeking to extradite him. Vinnik has that he is innocent of the charges levied against him.

Yet Wednesday’s move is a curious one, with the price of bitcoin (against the U.S. dollar) on WEX climbing to $8,999, as shown in the graph below:

By contrast, CoinDesk’s Bitcoin Price Index (BPI) hasn’t climbed above $6,396 since the start of trading on July 11.

The sharp increase started around 16:00 (UTC) from a comparatively high price point of about $7,800. To put things in perspective, Coinbase, a competing US-based crypto exchange, featured bitcoin prices throughout the entirety of the day between the range of $6,200 and $6,400.

So what gives?

As might be expected, the unexpected surge stoked speculation that WEX is either insolvent, suffering banking problems or gearing up for a calculated exit. BTC-e’s long-mysterious reputation and links to the now-defunct dark market Silk Road may arguably have provided fuel for such allegations.

The move also comes a day before WEX will undergo a planned maintenance period scheduled to last for 2 hours, according to a post on Twitter from July 9.

For its part, the exchange hasn’t commented on its public-facing channels about the price spike, and a message sent to WEX’s official account on Twitter wasn’t returned by press time.

Bitcoin image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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10 Bitcoin Winners and Losers of 2017

The year of 2017 was a fantastic year for some Bitcoin users, but others were not so lucky with the cryptocurrency.

Below, we’ll look at some of the most impressive success stories of the year, as well as the profiles of people who probably wish they’d never touched Bitcoin at all.

It’s a highly erratic currency, but people who invested in it before its recent prominence often found their foresight was lucrative in ways they never imagined at first.

This Anonymous Person Who Became a Bitcoin Millionaire

One anonymous person who posted a detailed story on Steemit said that in 2010, the price of each Bitcoin was so low that it was not even valuable enough to buy a pizza. Still, by the end of that year, the person reportedly had 12,000 Bitcoins and collecting the large number of them paid off.

That’s because by April 2013, the worth of each Bitcoin had ballooned to over $100. Due to some issues in the individual’s personal life and a few other non-Bitcoin-related factors, the person took a couple of breaks from Bitcoin but was never completely out of the loop with them. Eventually, this anonymous Bitcoin user heard that the 12,000 Bitcoins were now worth over $10 mln.

Despite that fortunate turn of events, the person only began selling them in small quantities so as to not attract attention. The individual also planned for the future by choosing investment strategies and did not let the rapid wealth impact their employment. As words of advice, the person suggests exercising patience and not getting greedy, while also keeping up on newsworthy events.

Erik Fineman

Erik Fineman began investing in Bitcoins in 2011 when he was only 11 after his grandmother gave him $1,000 and his brother offered him a tip about what to do with the money. In those early days, Bitcoins were only worth $12 each. However, when Fineman sold his first Bitcoins at the end of 2013, each one had a value of $1,200.

By then, Fineman had turned the $1,000 from his grandma into $100,000 and used it to start an online education company in 2014. He hadn’t had a pleasant experience in high school and thought that his new business venture could connect frustrated students and willing teachers over video chat. Fineman also moved to Silicon Valley, traveled the world and made a bet with his parents that if he were a millionaire by age 18, he’d not have to go to college.

In January 2015, Fineman sold his education company and was given the choice of accepting  $100,000 or 300 Bitcoins. He took the Bitcoins. Fineman also achieved his goal of becoming an 18-year-old millionaire and won’t be going to college. He says he’s happy learning from real-world experiences. However, Fineman stays busy with numerous projects, including involvement with NASA. Those activities — and savvy business sense — feasibly helped him get where he is today.

Jeremy Gardner

Jeremy Gardner is another person who boldly began investing in Bitcoin during the early days — notice a pattern here? — and received a substantial payoff. In 2013, one of Gardner’s friends got him some Bitcoins in exchange for cash and Gardener began feeling fascinated about how he could work with the currency with nothing more than an Internet connection. He also loved how there was no centralized regulatory body for Bitcoin.  

As Gardener became immersed in the Bitcoin world, he became a strong and emphatic voice in the cryptocurrency world, often using social media as a platform. He also wisely invested money into starting and supporting companies associated with Bitcoins and Blockchain technology.

Gardner stops short of disclosing how much money he’s made by investing in Bitcoin technologies, but is referred to as a “self-made millionaire.” Plus, he keeps a realistic perspective and understands that whenever the value of Bitcoins goes up rapidly, it’ll likely also go in the other direction soon. However, Gardener has a broad network of investments. Those interests are arguably helping protect his worth and allow him to get financial benefits from numerous sources.

Mr. Smith (not his real name)

Traveling the world is something many people dream of doing, but Mr. Smith has turned that aspiration into reality, all due to Bitcoin investments starting in 2010. A man with a college education and former Silicon Valley employee, Mr. Smith, heard about Bitcoins in July of 2010 and began investing in them a few months later.

Knowing he was in it for the long haul, Smith put his Bitcoin investments on the backburner until 2013, a time when the cryptocurrency’s value started rising rapidly. Eventually, the price per coin went up to more than 2,000 times what Smith originally paid for it. He now claims to have made $25 million from an initial $3,000 investment and uses the money to go on lavish, round-the-world travels that involve only staying in five-star hotels and flying first-class.

Smith still owns 1,000 Bitcoins, but only wants to sell those once the per-coin value reaches $150,000. He has no regrets about selling the rest and says he has everything he ever wanted, thanks to Bitcoins.

Tim Enneking

Tim Enneking is a prime example of how to succeed in Bitcoin investing. He’s a hedge fund manager who achieved the all-time annual records for both funds and funds of funds.

Enneking was skeptical of digital currencies, although he started running the world’s first digital currency fund. During his work, Enneking decided to rigorously research Bitcoins. After realizing he didn’t find any red flags, he concluded perhaps there was more to the cryptocurrency than he’d originally thought and started looking for ways to become more heavily involved in funds management.

Enneking now has experience overseeing funds within the US and abroad. He advocates being cautious while investing and taking time to understand market trends. Furthermore, Enneking reminds potential investors that due to the rapid fluctuations of digital currencies, it may take time to see investments become fruitful.

Olaf-Carlson Wee

You might not have heard of 26-year-old Olaf-Carlson Wee before, but he’s another person who recognized the potential of Bitcoins before many other people and got rich as a result. In February 2013, at a time when a single Bitcoin’s worth was between $20-30, Carson Wee began working for a Bitcoin startup called Coinbase.

At that time, Bitcoins were not part of the cultural consciousness yet, and the mere mention of them caused raised eyebrows if people were aware of them at all. However, Carlson Wee viewed Bitcoins as a promising currency. He made an arrangement with his employer to only get paid with them instead of physical money and started making transactions with Bitcoins whenever possible. Those decisions were ultimately profitable because they made Carlson Wee a millionaire.

The success stories you just read might be enough to make you want to start investing in Bitcoins immediately. But, if there’s a consistent thread in all those outstanding stories, it’s that the Bitcoin value changes without warning. However, some people have unfortunate circumstances related to Bitcoins that aren’t always about their falling value. You’ll see some examples below.  

James Howells

James Howells, a 32-year-old man from Wales, started working with Bitcoins from a computer in 2009. A year later, he disassembled the device and stored the parts in a drawer, then eventually threw them away.

Because several years’ worth of trash now lie on top of the valuable but discarded hard drive, retrieving it is an expensive process, and the condition of the hard drive is unknown. However, the reason why the ramifications of this failure became especially evident this year is that estimates suggest the hard drive and the Bitcoins it contains are worth more than $100 mln at today’s prices.  

Howells keeps an upbeat attitude about his lost fortune and knows there’s no point in getting too upset about it. If he ever does recover it, however, he’ll buy a Lamborghini.

Despite how things turned out for Howells, he hasn’t given up on cryptocurrencies. He’s still active with them today and puts his energies into one called Bitcoin Cash.

Mark Frauenfelder

Most people have gone through the frustration of forgetting passwords and PINs, but they probably don’t have to deal with the aftermath of losing the equivalent of $30,000 because of the blunder. However, Mark Frauenfelder invested $3,000 in Bitcoins last year and had numerous profitable ventures afterward. He talked to Bitcoin experts who told him that using a hardware wallet was the best way to protect his Bitcoin cache, so Frauenfelder bought one in November 2016 for $100.

While setting up the hardware wallet, he had to set up a PIN, along with a 24-word list used to recover access if needed. Frauenfelder wrote down the words on a piece of paper. Unfortunately, a cleaning company employee threw the document away. Frauenfelder didn’t think that was a big deal at first until he discovered he’d forgotten his PIN.

Desperate to regain access, he went online and posted on forums, plus contacted customer service representatives associated with the hardware wallet manufacturer. Frauenfelder even visited a hypnotist this spring, but the session did not bring about successful results.

At long last, he got help from someone who helped him hack into the hardware wallet and get the PIN and 24-word list. But, not without substantial heartache, stress and paying money for retrieval methods.

This woman who used Bitcoin to hire a hitman

The anonymous nature of Bitcoin may compel people to use the currency for illegal things. However, as a 58-year-old Italian woman who lives in Denmark learned, doing that can cause trouble. She hired a hitman to carry out a failed murder plot related to her boyfriend and used Bitcoin to pay for it.

A court ruling resulted in a six-year jail term. It also caused her to lose residence privileges in Denmark, where she’s lived for 30 years.

Cody Brown

Cody Brown, a startup executive, saw first hand how bad things could get during a Bitcoin theft. He lost $8,000 worth of Bitcoins in 15 minutes after a hacker got into his Verizon account, which was connected with Coinbase. Brown believed he got targeted because of a tweet he’d RT’d from a friend who’d also been hacked earlier. Brown is not hopeful of ever getting the stolen cryptocurrency back.

However, he’s also not giving up on Bitcoins. Brown believes that the companies involved in it will eventually figure out how to lock their systems down tighter and potentially add more fraud protection resources for customers.

Simon

Simon first used the TOR network in 2011. He stumbled upon one of those shady online marketplaces that offered all kinds of illegal things, — guns, drugs, counterfeit documents, you name it.

As a teenager, Simon decided that getting a brand new passport for a certain European country would be a neat thing to do. The price tag was 10,000 BTC. If he threw in an extra 6,000 BTC, the seller promised to get Simon a press ID from an esteemed newspaper, too. He couldn’t resist.

Simon transferred his funds to a crypto-exchange platform but, when it came time for the merchant to deliver, the merchant disappeared. ‘Maybe he got arrested?’ Simon wondered to himself.  He was confused, but he still had his money safely tucked away in the exchange account since the seller had vanished. All was okay as far as he was concerned.

Two years later, newspapers began reporting the arrest of a Russian man accused of money laundering. The name of the laundering service he had controlled was Liberty Finance, which Simon instantly recognized as the crypto-exchange platform he had used to keep his 20,000 BTC.

In light of the scandal, the FBI seized control of the exchange platform and all money associated with it. Simon kissed that money goodbye long ago, but it doesn’t make it easier for him to see how Bitcoin has appreciated over time.

If Liberty Finance hadn’t been a money laundering scam, Simon would have acquired some $400 mln dollars.

BTC-e

Despite the lack of regulation in the Bitcoin world, entities that are breaking the law still get caught. Case in point? BTC-e, a long-running Bitcoin exchange.

It received a $110 mln fine from the Federal Trade Commission for alleged money laundering. Also, Alexander Vinnik, a Russian man associated with the exchange got arrested and faces over five decades in prison if convicted.

Anatoly Kaplan

Another recent incidence of alleged questionable behavior from Russia comes from Anatoly Kaplan, the owner of ForkLog, a Russian cryptocurrency news outlet. According to reports, the Ukrainian Secret Service is investigating Kaplan in connection with alleged associations with Americans involved in unlawful activities.

The Ukrainian authorities searched Kaplan’s apartment and confiscated his laptop. Also, this is not the first time ForkLog has come to the attention of law enforcement officials. Kaplan maintains his innocence and asserts his site does not have technology capable of the things the Ukrainian police accuse him of doing.

Kaplan also says during the search and seizure related to the investigation, one of the Ukrainians tried to transfer some of Kaplan’s Bitcoins. Kaplan and his attorney plan to take legal action and are confident about a positive outcome, but even so, this event has already caused stress and unfavorable publicity for Kaplan and his ForkLog site.

These tales of wonder and woe prove that Bitcoin investments are not for the faint of heart.

The people who engage in them must be ready for ruin, but they might become amazingly prosperous instead.

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Greek Supreme Court Wants to Extradite Vinnik to the US, Final Decision Pending

Greece’s Supreme Court has upheld a US request to extradite alleged former BTC-e operator Alexander Vinnik.

Reports Wednesday confirm the support of sending the embattled Russian citizen to the US, where he faces money laundering charges.

Greece’s justice minister will now decide the ultimate outcome, with Russia and the US vying for custody of Vinnik for several months.

The move marks a blow for Vinnik himself, who had petitioned to be sent to his native country where he is wanted on lesser charges.

Since his initial arrest in Greece in July, BTC-e has ceased to exist, being reincarnated as WEX. Legal investigations are nonetheless still ongoing, with US authorities seeking to hand down fines totalling $122 mln between the exchange and Vinnik respectively.

Denying personal involvement beyond peripheral “advisory” role, Vinnik maintains his innocence.

In October, a lower Greek court had recommended “satisfying Russia’s request” for extradition, adding there was “no reason not to” hand him over to Moscow.

“The Supreme Court has in essence accepted that our client should be sent to the United States,” Vinnik’s lawyer said in official comments following the ruling.

“Our client has not made any response. He listened to the ruling as it was read out… It is now up to the justice minister to decide when and where our client will be sent.”

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Court Approves U.S. Extradition for Alleged BTC-e Operator

A Greek court has given the green light for the extradition of alleged bitcoin money launderer Alexander Vinnik to the U.S.

Said to be the former operator of defunct bitcoin exchange BTC-e, Vinnik is wanted by authorities in both Russia and the U.S. on different charges. As previously reported by CoinDesk, Vinnik had appealed to the court to be extradited to his native Russia where he faces lesser fraud charges. He has also denied his role as the operator of BTC-e, claiming he had merely worked as a technician at the exchange.

According to Reuters, the Greek supreme court yesterday rejected his appeal that he be returned to Russia. It is now up to the Greek justice minister to make the final decision on the matter, according to the news source.

Russia has previously criticized the decision to comply with the U.S.’s request for extradition. The county’s Ministry for Foreign Affairs said at the time that it “noted with regret” that the court had opted not to return Vinnik to Russia.

Vinnik was arrested in Greece in late July, accused of laundering billions of dollars in bitcoin through BTC-e.

In July, international law enforcement officials moved to shutter the BTC-e exchange, with U.S. prosecutors later unveiling a number of charges against both BTC-e and Vinnik, while a $110 million fine was handed down from the Financial Crimes Enforcement Network (FinCEN).

By September, the platform had gone back online, and claimed that it would refund users who lost money in the raids. Later that month, its operators launched a new exchange platform called WEX.

Law image via Shutterstock

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Alleged Bitcoin Launderer Faces Extradition Hearing Next Month

An alleged money laundered tied to the BTC-e bitcoin exchange and wanted by both Russia and the U.S. will attend an extradition hearing next month, according to new reports.

The Dec. 6 hearing, according to The Associated Press, represents a delay intended to allow for two witnesses to attend, according to a lawyer for Alexander Vinnik. Vinnik was arrested in July and accused of laundering billions of dollars through BTC-e, which was also targeted by law enforcement officials.

The delay represents the latest twist in a story that sparked global headlines in the wake of Vinnik’s arrest. U.S. prosecutors had filed charges against both Vinnik and BTC-e, with the Financial Crimes Enforcement Network (FinCEN) handing down a $110 million fine against the cryptocurrency exchange.

Vinnik has since remained in Greece after local authorities acted on a U.S. arrest warrant. And while a Greek court initially backed the request to extradite him to face charges in the U.S., Vinnik is seeking to be sent to Russia instead. As a result, both governments are pushing for their respective extradition requests to be granted, putting the decision in the hands of the Greek Supreme Court, as well as the Greek Justice Department.

In statements, Vinnik has declared his innocence in regards to the U.S. charges, though he acknowledged that he worked for BTC-e. BTC-e – which has since relaunched after having its domain seized by law enforcement – has denied any involvement with Vinnik.

Court image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.