Btc
What Happened To BTC-e.com?
If you logged into the crypkhổng lồ trang web BTC-e on July 25, 2017, hoping to manage your crypkhổng lồ portfolio, you would have sầu been greeted with this disconcerting message:
Logging on at a later date wouldn’t make any difference. The site was down. Permanently.
And that’s the boring part of the story. But we’re getting ahead of ourselves. Let’s back up.
BTC-e was a cryptocurrency trading platsize founded in July 2011 & closed in 2017. It allowed trading between the U. S. dollar, Russian ruble và lỗi currencies, and Bitcoin, Litecoin, Ethereum, & other cryptocurrencies.
The US government closed the exchange on allegations that it was involved in laundering money for ransomware schemes. In fact, one set of security researchers estimated that BTC-e was used to convert 95% of all ransomware payments into fiat currency.
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(Quick note: Ransomware is a type of malicious software that encrypts a person’s or organization’s files, making them inaccessible. The hacker who installed the software will only unloông xã the files in exchange for a ransom, usually paid in cryptocurrency. To turn the cryptocurrency inlớn fiat currency, a cryplớn exchange lượt thích BTC-e is needed.)
One of BTC-e’s founders, Russian national Alexander Vinnik, is also believed to lớn have played a role in the theft of 530,000 of the more than 800,000 Bitcoin stolen from Mt Gox.
Vinnik was sentenced to five sầu years in prison in France in 20trăng tròn but is still wanted for extradition khổng lồ both Russia & the US.
In this article, we’ll walk you through the history of the site, the legal (as well as illegal) purposes it was used for, và the criminal charges and convictions that came from it.
What Was BTC-e?
Whether it be centralized exchanges such as Binance, Kraken, và Coinbase, or decentralized protocols like Uniswap or Pancake swap, there is no shortage of options for buying, selling, và storing coins và tokens.
However, this wasn’t always the case, & for a time, the number of options was severely limited. For this reason, BTC-e rose khổng lồ prominence shortly after its release in 2011, and at one point, handled 3% of all known BTC volume.
In the early years, the platkhung was plagued by frequent downtime, primarily due khổng lồ constant DDOS attacks and hệ thống issues. However, as time went on, reliability improved, and its popularity continued lớn grow.
On July 25, 2017, users began complaining that any attempts lớn access the site were met with a message from the US Department of Justice stating that the domain had been seized due lớn a joint US Secret Service/FBI investigation.
According lớn a statement by Michael D. Ambrosio, a special agent with the USSS, “BTC-e was noted for its role in numerous ransomware & other cyber-criminal activity; its take-down is a significant accomplishment & should serve as a reminder of our global reach in combating transnational cybercrime.”
This investigation left many users without access lớn their funds và with many more questions than answers. However, BTC-e denied these allegations and stated that the individual arrested in connection with these crimes, the aforementioned Alexander Vinnik, was not an employee or founder of the now-defunct crypto exchange.
The Opening Of Wex.nz
As a result of the investigation & seizure of the tên miền, the FBI came into lớn possession of nearly 38% of all Cryptocurrencies and fiat stored on the exchange.
In response lớn this, those behind BTC-e launched another exchange & rebranded themselves as Wex.nz, promising to repay any customers who had lost funds from the seizure. Wex.nz was a 1:1 copy of the previous BTC-e site và sought lớn piông xã up where the old BTC-e platform left off.
Although some users reported receiving about half of their lost funds, the promised refund never materialized, và business began lớn slow down heavily.
After only a year of operation, Wex.nz lost many of its domain name names và proceeded to disable withdrawals before shutting down completely. Unfortunately, this shutdown once again left many investors without access lớn their funds.
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At the time of closing, Wex.nz was run by a Russian national by the name of Dmitri Vasilev, who sold the WEX.nz database lớn a man named Dmitri Khavchenko.
As if the story could not get any odder, Khavchenko was an ex-militia man who fought in Crimea khổng lồ tư vấn Russian Annexation. Not only did he have ties to the powerful Russian Oligarch Konstantin Malofeev, but he also had plans to start a new cryptocurrency exchange using the Wex database that he planned to headquarter in Donbas, Ukraine, which was a warzone at the time.
At this point, Alexei Bilyuchenko, the ex-tech administrator of BTC-e and co-founder of Wex, was arrested in Russia as part of a criminal investigation by Russian authorities. The investigation stemmed from numerous complaints filed in Russia và Kazakhsrã that millions of dollars worth of cryptocurrency were leaving Wex wallets between July & October of 2018.
Once in custody, Bilyuchenko claimed that he had been forced to skết thúc a large amount of the cryptocurrency held by Wex to lớn wallets owned by staffers of the Federal Security Service (FSS), which as some may know, is the infamous successor to the Soviet KGB. As of now, the FSS has refused to comment on these claims.
The ex-tech admin also stated that he had been cđại bại with ex BTC-e operator Alexander Vinnik & that prior khổng lồ his arrest in Greece, Vinnik had been involved in the Mt. Gox scandal and was helping hackers launder stolen bitcoins through BTC-e.
Vinnik, Mt. Gox, and BTC-e
As some may know, Mt. Gox was a Japanese cryptocurrency exchange that launched in 2010 và remained in operation until February năm trước. At one time, Mt. Gox handled over 70% of all Bitcoin transactions worldwide & is considered by many khổng lồ be the first significant Cryptocurrency exchange.
In February of năm trước, Mt. Gox stopped all trading và filed for bankruptcy protection. Shortly after this, the exchange announced that roughly 850,000 Bitcoins had been stolen from the platform.
There is a direct connection between the stolen Bitcoins, Vinnik, and BTC-e. According to WizSec, sometime around 2011, a hacker or group of hackers gained access to lớn private keys that granted them access to a major Mt. Gox cryptocurrency wallet.
From that time, 850,000 Bitcoin was removed from the platform and laundered through a vast network of wallets across several different countries. Of the 850,000 Bitcoin taken from Mt. Gox, it is alleged that roughly 300,000 stolen Bitcoin went directly to three wallets that only BTC-e admin could access, one of which was controlled directly by Vannik.
Aside from Mt. Gox, US authorities claimed that Vannik & BTC-e had been involved in washing over 95% of all ransomware payments và that Vannik himself had a h& in developing a ransomware software called Locky.
What Happened To Vinnik?
As a result of an international warrant filed by the US, Vannik was arrested in July of 2017 while he was vacationing in northern Greece. Shortly after his arrest was made public, Russian authorities filed for extradition, hoping to lớn bring Vannik baông xã lớn Russia to lớn try hyên ổn on money laundering và fraud charges.
Because of this, Greece was put in something of a difficult position for two reasons. First, Russia was Greece’s leading supplier of both oil and natural gas, & second, the US was Greece’s most prominent NATO ally.
In a move sầu to lớn appease both sides, Greece sent Vannik lớn France in 20đôi mươi, where he was eventually sentenced to five sầu years in prison. However, a year later, Vannik was acquitted on several charges as French authorities could not prove any connection between Vannik và the distribution of the Locky ransomware software.
As of April, 2021, Vannik is still serving his jail sentence, & Russia and the United States continue to engage in a tug of war extradition battle. The contentious issue was made even worse when the US accused Russia of laundering money through BTC-e in an attempt lớn interfere with the năm nhâm thìn presidential elections.
