Alexander Vinnik is the alleged Russian mastermind of a US$4 billion digital money laundering scheme. “He had been waiting for Greece’s Supreme Court to decide whether he could be extradited to the US, where he faces a cybercrime trial,” Dr Glinavos explained. “The court ruled that Vinnik can be extradited to face charges in the US. It’s now up to the Greek justice minister to determine whether the extradition will take place – but it is likely Vinnik will be facing US authorities before long.”
Despite surfacing stories about Bitcoin fraud cases, many people are still interested in investing in Bitcoin but for many it poses some challenges to understand what Bitcoin actually is.
Dr Glinavos wrote: “Bitcoin and other cryptocurrencies are based on blockchain technology, an information storage system which works as a decentralised ledger. Information is not held on a central server, but is duplicated and dispersed across a huge network. Every time this information is updated, a corresponding change is made across the network.
“What is the benefit of this decentralisation? Blockchain enthusiasts will tell you that the system is impossible to corrupt or manipulate. Any attempt to “hack” information will be rejected by other nodes in the system that hold the true copy of the information. If you have been awarded a digital token, a bitcoin, you can be sure (we are told) that it is genuine.”
However, the Senior Lecturer warned that the decentralised nature of the ledger and the anonymous nature of the originators and holders of bitcoin potentially make it a wonderful conduit for illegally obtained funds.
So should we invest in Bitcoin? Dr Glivanos says: “Before you make up your mind, remember this: the last innovation in finance promising incredible rewards with appropriately apportioned risks was the creation of synthetic CDOs and derivative-laden layercakes in the mid noughties. And we all know how that went.”