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What Happened To BTC-e.com?

If you logged inkhổng lồ the crypkhổng lồ trang web BTC-e on July 25, 2017, hoping khổng lồ manage your crypto lớn portfolio, you would have been greeted with this disconcerting message:

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Logging on at a later date wouldn’t make any difference. The site was down. Permanently.

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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 platform founded in July 2011 & closed in 2017. It allowed trading between the U. S. dollar, Russian ruble và euro currencies, & Bitcoin, Litecoin, Ethereum, and other cryptocurrencies.

The US government closed the exchange on allegations that it was involved in laundering money for ransomware schemes. In fact, one mix of security researchers estimated that BTC-e was used to convert 95% of all ransomware payments inlớn fiat currency.

(Quiông chồng 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 chồng the files in exchange for a ransom, usually paid in cryptocurrency. To turn the cryptocurrency into fiat currency, a crypto exchange lượt thích BTC-e is needed.)

One of BTC-e’s founders, Russian national Alexander Vinnik, is also believed lớn have sầu played a role in the theft of 530,000 of the more than 800,000 Bitcoin stolen from Mt Gox.

Vinnik was sentenced khổng lồ five years in prison in France in 20trăng tròn but is still wanted for extradition to both Russia và 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 lượt thích Uniswap or Pancake swap, there is no shortage of options for buying, selling, and storing coins và tokens.

However, this wasn’t always the case, and for a time, the number of options was severely limited. For this reason, BTC-e rose to lớn prominence shortly after its release in 2011, và at one point, handled 3% of all known BTC volume.

In the early years, the platsize was plagued by frequent downtime, primarily due to constant DDOS attacks & server issues. However, as time went on, reliability improved, & its popularity continued lớn grow.


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Screenshot of the BTC-e.com dashboard

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 tên miền had been seized due khổng lồ a joint US Secret Service/FBI investigation.

According khổng lồ a statement by Michael D. Ambrosio, a special agent with the USSS, “BTC-e was noted for its role in numerous ransomware and other cyber-criminal activity; its take-down is a significant accomplishment and should serve sầu as a reminder of our global reach in combating transnational cybercrime.”

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This investigation left many users without access to their funds and with many more questions than answers. However, BTC-e denied these allegations & 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 lớn exchange.

The Opening Of Wex.nz

As a result of the investigation and seizure of the tên miền, the FBI reputedly came inlớn possession of nearly 38% of all Cryptocurrencies and fiat stored on the exchange.(We could not find a statement from either the FBI or BTC-e.com that confirms the 38% figure, although BTC-e.com has apparently confirmed that the FBI took control of some of their wallets).

In response khổng lồ this, those behind BTC-e launched another exchange and rebranded themselves as Wex.nz, promising to lớn repay any customers who had lost funds from the seizure. Wex.nz was a 1:1 copy of the previous BTC-e site & sought to piông xã up where the old BTC-e platkhung left off.


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Although some users reported receiving about half of their lost funds, the promised refund never materialized, and business began to lớn slow down heavily.

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After only a year of operation, Wex.nz lost many of its domain names & proceeded lớn disable withdrawals before shutting down completely. Unfortunately, this shutdown once again left many investors without access khổng lồ their funds.

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 to lớn support Russian Annexation. Not only did he have sầu ties to the powerful Russian Oligarch Konstantin Malofeev, but he also had plans khổng lồ start a new cryptocurrency exchange using the Wex database that he planned lớn headquarter in Donbas, Ukraine, which was a warzone at the time.

At this point, Alexei Bilyuchenko, the ex-tech administrator of BTC-e & 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 and Kazakhsrã that millions of dollars worth of cryptocurrency were leaving Wex wallets between July và 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 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 lớn bình luận on these claims.

The ex-tech admin also stated that he had been close with ex BTC-e operator Alexander Vinnik và that prior to his arrest in Greece, Vinnik had been involved in the Mt. Gox scandal và was helping hackers launder stolen bitcoins through BTC-e.

Vinnik, Mt. Gox, & BTC-e

As some may know, Mt. Gox was a Japanese cryptocurrency exchange that launched in 2010 & remained in operation until February năm trước. At one time, Mt. Gox handled over 70% of all Bitcoin transactions worldwide & is considered by many to lớn be the first significant Cryptocurrency exchange.

In February of năm trước, Mt. Gox stopped all trading & filed for bankruptcy protection. Shortly after this, the exchange announced that roughly 850,000 Bitcoins had been stolen from the platkhung.

There is a direct connection between the stolen Bitcoins, Vinnik, & BTC-e. According to WizSec, sometime around 2011, a hacker or group of hackers gained access lớn private keys that granted them access khổng lồ a major Mt. Gox cryptocurrency wallet.

From that time, 850,000 Bitcoin was removed from the platsize & 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 and that Vannik himself had a hvà 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 lớn bring Vannik back khổng lồ Russia lớn try hlặng on money laundering and 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, and second, the US was Greece’s most prominent NATO ally.

In a move khổng lồ appease both sides, Greece sent Vannik to lớn France in 20trăng tròn, 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.

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As of April, 2021, Vannik is still serving his jail sentence, và Russia & the United States continue lớn 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 to lớn interfere with the năm nhâm thìn presidential elections.