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The long thorny path of one of Russia's largest cryptocurrency exchanges, BTC-e, and then its successor, WEX, has finished. And special agencies destroyed the exchange - first the FBI, and then their Russian counterparts – FSB. But if the FBI officially seized the equipment and some of the assets under the pretext of money laundering, then several enterprising FSB workers took a "personal initiative" and transferred all the assets to their own accounts. Attempts to return the money in a civilized way are unpromising, the desperate owners are trying to solve the issue with the help of telephone terrorism.
The higher the jackpot – the greater the risk of becoming prey for raiders in Russia. And the representatives of special agencies have the biggest appetites, not criminals or business people. You can recall the "conflict" between Mr. Chichvarkin and a number of people from the "K" Department of the Russian Interior Ministry, but there it was "only" about $ 20 million. Mr. Chichvarkin is free, not even in poverty in London, but there were no consequences for the raiders, despite the inflated scandal in the media and other attempts by the wronged owner to regain what was his. The cryptocurrency market turned out to be more promising than retail - several employees of the Russian FSB, and their tipsters were able to get 20 times more when they got to the "gold" flash cards, with encrypted cryptocurrency assets of WEX exchange (the former platform of BTC-e).
1 year of business life in Russia is equal to 10, five years is already an era. BTC-e cryptocurrency exchange, which opened in 2011, was among the three largest in Russia and the TOP-20 in the world in terms of trading volume on the pairs: bitcoin/dollar and bitcoin/ruble, for three years. The exchange thrived - the daily turnover reached 80 million dollars per day.
Business protection was successfully built - BTC-E was periodically subjected to powerful DDoS attacks. There were attempts to withdraw assets by simulating the addition of funds into accounts through the Liberty Reserve system and buying up cryptocurrencies (Bitcoin, Litecoin and Namecoin). The scammers were not lucky - the main part of the bitcoins was stored offline. The platform did not even close: illegitimate transactions were canceled, and users' balances were returned to their current state. But the joy was not long. On a very bad day in 2016, the FBI became interested in the work of the traders.
Let's speak frankly – there has to be a reason. The success and the large number of clients was provided for the exchange by an approach- the origin of money does not matter and to participate in the auction no verification is needed. The opportunity for anonymous trading provided by the exchange and an annual turnover of $4 billion became a "red flag" and one of the founders of the business - Alexander Vinnik was behind bars, and the equipment in the United States and part of the assets- were seized.
The second person – Alexander Byulechenko, nickname 'admin', responsible for the technical part of the business, kept the base and most of the assets. One of the major clients of BTC-e, Dmitry Vasiliev, offered to launch BTC-e again and became the founder of the new platform, while Byulechenko, as before, remained in the shadows. WEX exchange became the successor of BTC-e.
On September 15, 2017, a new and very short stage of business life began. The successor company received users' personal data, and restructured clients' digital assets: 62% - in monetary and cryptocurrency forms, 38 % - in the form of WEX tokens (the management promised to buy them out in a year) and it began conducting operations under its financial license. The exchange began to spin quite effectively – the daily turnover reached 20 million dollars per day.
Unfortunately, the second stage of the exchange's life turned out to be "muddy". There are reasons to believe that Byulechenko began to prepare for an exit scam (to gather money and disappear):
- The cost of cryptocurrencies on WEX has significantly exceeded the average on other exchange platforms;
- Wex.nz closed the withdrawal of the majority of the cryptocurrencies, and despite promising to "complete the technical work", it never opened;
- The charts on the tradingview.com platform stopped receiving and displaying up-to-date trading information;
- Attempts were made to withdraw millions of dollars' worth of cryptocurrencies through Binance from WEX wallets (the scammer failed).
At the end of November, the wex.nz domain was blocked in Singapore, by the registrar's decision - the owners of the site provided false information. So only the "most stubborn" tried to work on the site, by manually entering the last known IP addresses of the site in the "hosts" file, but in December this possibility was also lost.
Most likely, Mr. Vasiliev, unlike Byulechenko, had other plans for the exchange – he was looking for a patron and investor who could help to work in Russia. Vinnik's lawyer, Musatov, introduced him to the circle of major Russian IT entrepreneurs. Vasiliev met the owner of "Tsargrad" group, Konstantin Malofeev. On the part of the potential investor, a proposal was made to re-register assets under Vladex cryptocurrency exchange "To attract digital investment to the real sector of the Far East economy". Mr. Malofeev wanted to put his son in charge of the new "special settlement infrastructure to preserve the financial and economic sovereignty of the Russian Federation".
Suddenly there was a new buyer, Dmitry Khavchenko (codename "Moryachok" / “Sailor”). He is connected with Malofeev by a mutual friend, the former Prime Minister of the DPR, Alexander Borodai. His interest in cryptocurrency and WEX exchange is clear – it allows making settlements and transferring funds in independent republics, bypassing any sanctions. By this point, Vasiliev completely lost the ability to manage the situation. He lost his rights to Khavchenko, was rewarded and went out of the business.
In the spring of 2018, the last stage began- the sale of cryptocurrency on WEX exchange for cash in Moscow. It was already impossible to get funds through a bank or payment system, transactions were carried out as follows: the owner of the cryptocurrency generated a code to the buyer, who entered it into the system - bitcoins were transferred to his wallet. The situation on the platform, the transfer of money outside the exchange, and the obvious risks associated with fraud did not stop the buyers.
The last chord is the hunt for assets. Malofeev and co. involved their "friends" from the FSB to get the exchange's assets, which are in the hands of Byulechenko. There was nothing "special" to be done with the former owner. There were no basements, no tortures with a soldering iron like in the last century – everything was furnished in a civilized way. They just brought admin to Moscow, politely talked, "kindly asked", and after a couple of hours, the former custodian of the assets gave up and transferred the cryptocurrency to the "FSB Fund", and then transferred the customer database.
The life of the exchange has ended – attempts from the affected WEX traders have begun to return their funds and punish the fraudsters. Attempts by the initiative group to recover their funds legally by means of media coverage of the problem, through the prosecutor's office and independent search for persons guilty of misappropriation of funds look rather pale. At least for two years, no progress has been made.
Out of desperation, some of the victims from WEX are trying to draw the attention of officials to the problem and to the individuals who participated in the raider attack, using "telephone terrorism" - messages about the mining of schools, shopping centers, etc.*. But in this way, they only anger ordinary people and set public opinion against both the affected community and the cryptocurrency market as a whole.
The traders in the cryptocurrency market today resemble sailors of the past. Those were on wooden "shells", by taking daily risks, they crossed trade routes teeming with pirates. And no experience of the sailor could help if fortune "turned its back on him". Same in Russia, even the owners of a large batch of cryptocurrency are not protected from meeting with scammers and raiders of all kinds. It remains to wish them "a successful voyage in a sea teeming with predators".
*https://news.rambler.ru/other/43401879-s-chem-svyazana-ocherednaya-volna-telefonnogo-terrorizma-i-pri-chem-tut-malofeev/?updated
** More on RBC: https://www.rbc.ru/magazine/2018/07/5b3b9ed99a79475f83b4f168
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