Bitcoin Wallet of the Failed BTC-e Exchange Wakes Up

A crypto wallet attributed to the BTC-e exchange that's been linked to the 2014 Mt. Gox hack burst into life Wednesday with its largest transaction since August 2017, sending a total of 10,000 bitcoin ($165 million) to two unidentified recipients.

As part of the transaction, which took place around 08:38 UTC, a wallet that received 3,500 bitcoin forwarded 300 BTC to another destination. That was split further and landed in several wallets not attributed to any known custodial service. The distribution pattern is open to interpretation: It's possible the wallet owner simply sent the money to other wallets of their own, sent it to other people or cashed out through an unofficial over-the-counter broker. The remaining 6,500 stayed put.

Mt. Gox, the first bitcoin exchange, was robbed of 744,408 BTC and shut permanently in 2014. Alexander Vinnik, alleged to be the operator of BTC-e – which he denies – was arrested in 2017 at a resort near Thessaloniki, Greece, at the request of the U.S. Department of Justice on money laundering and other allegations.

The wallet involved in Wednesday's transaction was attributed to BTC-e by blockchain analytics system Crystal Blockchain. The transfer was noticed by Russian crypto entrepreneur Sergey Mendeleev, who published the observation in his Telegram channel. Blockchain data provides a limited amount of information, which is open to interpretation.

Vinnik, a Russian national, faced competing extradition claims from Russia, France and the U.S. He was extradited to France from Greece in 2020 and sentenced to five years in prison for money laundering. In August of that year he was extradited to the U.S. to face allegations of “computer intrusions and hacking incidents, ransomware scams, identity theft schemes, corrupt public officials and narcotics distribution rings,” according to a 2020 indictment by the California court. He is now at the Santa Rita Jail in Dublin, California, according to the court case docket.

Russian Link

Soon after BTC-e closed and its servers seized by the FBI in 2017, a clone started under the name WEX. After a year of operation, WEX froze all withdrawals and shut down. CEO Dmitri Vasilev said he sold the exchange to Dmitri Khavchenko.

Before and after shutting down, WEX wallets were drained of millions of dollars worth of crypto, CoinDesk reported at the time. Users filed police reports and several investigations were reportedly launched in Russia and Kazakhstan. Over the years, Vasilev has been arrested in Italy, Poland and Croatia at the request of the Russian police, but every time released soon after.

The most recent picture in Vasilev's Instagram profile was posted on May 3, geotagged as taken in Amsterdam. On the photo, Vasilev is standing in front of a store named Scamm.

In his public talks, as well as in group chats with WEX users, Vasilev said control of users' crypto had always been with the anonymous WEX admin. In 2019, another Russian national, Alexei Bilyuchenko, confessed to being the admin. He said he was forced to transfer all the money to two unidentified officers of Russia's Federal Security Service (FSB), according to the criminal case materials obtained by BBC.

According to a group of WEX users, Bilyuchenko is currently in a Russian prison called Matrosskaya Tishina in Moscow, because a letter sent to him through the official prison mail system was reported as received.