BTC-e

BTC-e was a cryptocurrency trading platform primarily serving the Russian market, with servers located in the United States. The U.S. government seized their website and funds in 2017.[1][2] It was founded in July 2011 by Alexander Vinnik and Aleksandr Bilyuchenko,[3] and as of February 2015 handled around 3% of all Bitcoin exchange volume.[4] The platform was eventually taken over by Russian Orthodox oligarch Konstantin Malofeev, and funds from BTC-e were used for the war in Donbass, under the control of the FSB.[5]

BTC-e
IndustryBitcoin Exchange
Founded2011
Headquarters
Russia
Websitebtc-e.com

It was a component of the CoinDesk Bitcoin Price Index since the index's September 2013 formation.[6]

BTC-e was operated by ALWAYS EFFICIENT LLP, which was registered in London and was listed as having two officers (Sandra Gina Esparon and Evaline Sophie Joubert) and two people with significant control: Alexander Buyanov and Andrii Shvets.[7]

The US Justice Department attempted to close down BTC-e on 26 July 2017, when they charged Vinnik and BTC-e in a 21-count indictment for operating an alleged international money laundering scheme and allegedly laundering funds from the hack of Mt. Gox.[2][8]

History

BTC-e was established in July 2011, handling a few coin pairs, including Bitcoin/U.S. dollar and I0Coin to Bitcoin.[9] By October 2011, they supported many different currency pairs, including Litecoin to dollars, Bitcoin to rubles and RuCoin to rubles.[10]

The BTC-e website went offline on 25 July 2017, following the arrest of BTC-e staff members and the seizure of server equipment at one of their data centres. These events led to the closure of the BTC-e service.[11][12]

To repay its customers, BTC-e created WEX tokens, which were used to represent customers' seized equity until its funds were also seized by US Government.[5] The WEX tokens represented $1 and were issued to account for the value of customers cryptocurrencies at the time of the seizure. Alexander Vinnik was convicted and sentenced to 5 years in prison in France while refusing to testify during his trial.[13] He was acquitted on involvement with the Locky ransomware charges.[13] WEX exchange is ultimately controlled by FSB and managed by Konstantin Malofeev.[5]

References
  1. Benjamin Guttmann (2014). The Bitcoin Bible Gold Edition. Books on Demand. pp. 175–176. ISBN 9783732296965.
  2. "Russian National And Bitcoin Exchange Charged In 21-Count Indictment For Operating Alleged International Money Laundering Scheme And Allegedly Laundering Funds From Hack Of Mt. Gox". United States Department of Justice. 26 Jul 2017. Retrieved 22 Oct 2018.
  3. Eckel, Mike (November 28, 2019). "How Much Did Russian Spy Agencies Rely On Bitcoin? New Hints In Leaked Recordings". RFERL. Archived from the original on November 30, 2019. Retrieved June 27, 2020. Since its inception in 2011, founded and operated by Vinnik and a partner named Aleksandr Bilyuchenko, BTC-e's business model was heavily reliant on the criminal underworld and people and entities interested in anonymity or hard-to-trace transactions, according to U.S. and other officials.
  4. "Bitcoin Exchanges Market Share". Bitcoinity. Retrieved 2015-02-10.
  5. "Russian Agents Suspected of Cleaning Bitcoin-Exchange Platform". www.occrp.org. Retrieved 2023-03-07.
  6. Del Rey, Jason (September 11, 2013). "What's a Bitcoin Really Worth? CoinDesk Thinks It Has the Answer". All Things D. Retrieved 22 Oct 2018.
  7. "ALWAYS EFFICIENT LLP - Overview". Companies House. Retrieved 22 Oct 2018.
  8. "Vinnik Superseding Indictment Redacted for U.S. District Court Northern District of California San Francisco Division Case No CR 16-00227 SI". United States Department of Justice. Archived from the original on 27 July 2017. Alt URL Archived 2020-07-27 at the Wayback Machine
  9. @yourbtcc (June 21, 2017). "Hi, BTCC is the longest-running bitcoin exchange worldwide. BTC-E was established on July 17, 2011. BTCC was founded on June 9, 2011" (Tweet). Archived from the original on June 27, 2020 – via Twitter.
  10. BTC-e (2011-10-25). "Start trading on a pairs of BTC/RUB, LTC/USD, RUC/RUB, USD/RUB!". Archived from the original on 2015-11-21. Retrieved 2015-11-20.
  11. "Russian National And Bitcoin Exchange Charged In 21-Count Indictment For Operating Alleged International Money Laundering Scheme And Allegedly Laundering Funds From Hack Of Mt. Gox". United States Department of Justice. 26 Jul 2017.
  12. "Russian wanted in US caught in Greece for money laundering". The Daily Star Newspaper - Lebanon. Associated Press. 2017-07-26. Archived from the original on 2017-07-27. Retrieved 2017-07-28.
  13. Catalin Cimpanu (2020-12-07). "BTC-e founder sentenced to five years in prison for laundering ransomware funds". ZDNet. Retrieved 2020-12-09.
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