A BBC investigation has revealed a potential link between Russia’s Federal Security Bureau (FSB) and the recent shutdown of the cryptocurrency exchange WEX.
Alexei Bilyuchenko, who confessed to be the tech administrator of the infamous BTC-e crypto exchange and later co-founder of WEX, claimed that he had been engaged by the Russian intelligence to comply in an investigation that had been active since early 2018.
What is shocking is that, according to Bilyuchenko, he was forced to dump every detail about each customers’ digital wallet to the Russian Intelligence. This essential information would empower the intelligence agency to access and transfer the digital assets of the customers. The total worth of the entire Bitcoin(BTC)trade haul in the digital wallets figured at $450 million.
The BBC claims that it obtained access to audio recordings in which there is an anonymous person called ‘Anton,’ presumably referring to ex-FSB officer Anton Nemkin, with Aleksey Bilyuchenko, the co-founder of BTC-e. A Russian oligarch and billionaire named Konstantin Malofeev is also part of the network which was involved in crippling the crypto exchange WEX (an offshoot of BTC-e).
The report by BBC reveals that Nemkin pressured Bilyuchenko to handover the information of the digital wallets hosted on WEX’s platform. This meant that the ownership of the digital assets will be transferred from WEX to the Russian FSB. For three days, Bilyuchenko had been attending meetings in the FSB’s office in central Moscow where he was forced to reveal the modus operandi of WEX.
Bilyuchenko also allegedly agreed to the demand for the digital wallets and consequently, $450 million were transferred from WEX to the FSB.
Crypto Chaos in Greece and Italy
WEX was launched in 2017 after BTC-e had collapsed following a legal battle which revealed that BTC-e had been engaging in money laundering of almost $4 billion worth of funds across the globe. After Alexander Vinnik was arrested in Greece following indictment by a U.S. court on multiple money laundering charges, Biyuchenko escaped the arrest and fled to Russia.
Then Biyuchenko used the BTC-e database to create a new crypto exchange called WEX. The founders at WEX promised to return the money lost to the customers during the BTC-e chaos. However, millions of dollars started to leave the exchange and got transferred to other crypto exchanges. After users started filing police reports against WEX, the founder and CEO Vaselev was arrested this summer in Italy on request of the Russian police but released soon after.