BTC-e exchange linked to Mt.Gox hack

The BTC-e.com exchange is one of the oldest and most “mysterious” bitcoin exchanges. Its 6-year run may have unfortunately come to an end.

The BTC-e.com exchange is one of the oldest and most “mysterious” bitcoin exchanges. Its 6-year run may have unfortunately come to an end.

As you can read on the official website Twitter profile, the stock exchange is allegedly out of order, which could last 5-10 days. There would be nothing particularly surprising about that, but at the same time, Greek police arrested Russian Alexander Vinnik on money laundering charges.

According to Reuters, police statements indicate that Vinnik was associated with a large bitcoin platform operating since 2011. It was that year that the BTC-e exchange was established.

In turn, the Greek daily thess.gr, states directly that Vinnik was associated with the BTC-e exchange. According to the service:

“As indicated in the documentation provided by the US Department of Justice, the BTC-e exchange is one of the largest money laundering entities in cyberspace”

”According to estimates by US authorities, at least $4 billion has been laundered on this platform since 2011”

Vinnik was also allegedly under surveillance by the FBI for several months. Today, at the request of the American authorities, he was arrested during a holiday stay at a hotel in Chalkidiki, where he was staying with his partner. The arrest itself surprised him. He is currently waiting in custody, from where he will probably be deported to the US. The extradition process could take up to 2 months.

It should be noted that so far there is no official information that Vinnik was the owner or a person associated with the BTC-e.com exchange, but unfortunately everything indicates this.

It is even more unknown what happened to the stock exchange itself and the funds deposited there. The stock exchange was shut down yesterday, the arrest took place as the media claims today. If the chronology is correct, the shutdown of the stock exchange did not occur as a result of Vinnik’s arrest. It is also difficult to suspect the services of closing the stock exchange, because such a move could scare Vinnik, although it is likely. This most important issue for stock exchange users remains unexplained for now.

The BTC-e.com exchange was/is a rather specific exchange. It is known that its owner is Russian, the company responsible for the exchange is registered in Cyprus and the servers themselves were located in Bulgaria until recently. The AML procedures themselves did not actually apply there. The exchange therefore provided a lot of anonymity. Money could be laundered on the exchange, but the owner himself did not have to be directly involved in it and only turned a blind eye to what was happening on his platform.

BTC-e is one of the oldest bitcoin exchanges in the world. Due to its longevity, it enjoyed great trust from users.

BTC-e exchange linked to Mt.Gox hack

This is the most mysterious and shocking motif of this story.

According to dailythess.gr, documents from Greek authorities show that 306,853 BTC stolen after the attack on Mt. Gox in 2014 ended up on the BTC-e.com exchange.

On the other hand WizSec, a Japanese network security firm, claims that Vinnik himself may be responsible for the 2011 Mt.Gox hack or possibly for laundering stolen funds (also from Bitcoinica and Bitfloor).

WizSec is the author of reports (1, 2) on the hacking of the Mt.Gox exchange and the operation of the bot “willy”. For the past few years, it has been analyzing the hacker’s addresses, keeping its work secret and cooperating with the services. Today, in connection with Vinnik’s arrest, WizSec decided to reveal the result of its work. We can probably expect a comprehensive report soon.

Update – 27/07/2017

There is already official confirmation from the US Department of Justice that the BTC-e.com exchange is facing money laundering charges. Alexander Vinnik is a defendant as a person closely associated with the exchange.

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