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The defunct cryptocurrency exchange platform, WEX, had reportedly transferred $450 million in cryptocurrencies to the Federal Security Bureau (FSB), a Russian intelligence agency. This was concluded via an investigation done by the BBC’s Russian Service and published on the 15th of November.
The Plot Thickens
BBC has recently started an investigation of the crypto exchange BTC-e. Alexander Vinnik, a co-founder of BTC-e, is accused of fraud and money laundering. The total estimated amount of funds laundered during the six-year period amounts to $4 billion in Bitcoin (BTC). Through the investigation, new details have been revealed that reportedly connects the FSB with customer funds previously lost.
BBC managed to get its hands on audio files that reportedly connect Aleksey Bilyuchenko and Konstantin Molofeyev to a figure by the name of Anton. Aleksey is the co-founder of BTC-e, Konstantin is behind the sale of the WEX exchange, and Anton is suspected to be the former FSB officer Anton Nemkin.
Anton reportedly outright asked Bilyuchenko to hand over WEX’s cold wallets during a business meeting that happened in 2018. After the supposed handover happened, Bilyuchenko was quickly delivered to Moscow’s FSB department. Bilyuchenko was questioned about WEX operations by officers that were dressed in civilian clothing.
A day later, Anton sent more alleged demands Bilyuchenko’s way. Anton simply demanded Bilyuchenko to give all the cryptocurrency stored in WEX’s wallets, reportedly saying that assets will be sent to the “fund of FSB of Russia.” When the reported funds were handed over, WEX held a total of $450 million in cryptocurrencies, a part of it having belonged to the exchange’s customer base.
Bilyuchenko caved under the pressure and conceded to move the funds into the FSB’s accounts. The accounts of the FSB received 30, 000 in BTC as well as 700,000 in litecoins, information that was gleaned through places like Explorer.Litecoin.net and Blockchain.com. The grand total of the funds Bilyuchenko sent sums up to around $350 million at the time of the transfers.
Accusations Against Associates
WEX’s former CEO, Dmitri Vasilyev, was arrested in July this year. The arrest that happened in Italy is in regards to a criminal investigation done by the police of Almaty, Kazakhstan. Vasilyev is suspected of having defrauded a local investor out of $20 000 via the WEX exchange, and criminal charges have been laid against him accordingly.
In the same month, the US prosecutors have filed a complaint against Vinnik and the BTC-e exchange. The Financial Crimes Enforcement Network (FinCEN) has concluded that BTC-e and Vinnik must pay fines in civil penalties. The total of the fines is $12 million for Vinnik and $88 million for the exchange itself. The filing stated that neither groups tried to properly regulate their exchange or register the company with FinCEN.