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Even though the Russia-based BTC-e crypto exchange has already perished from this world, it keeps producing crypto news, and not the good kind. Now, its second CEO, Dmitry Vasiliev, has also been arrested and detained by law enforcement agencies, this time in Italy.
The now-defunct BTC-e was widely known as the largest Russian-language crypto platform in the world. It was notoriously known for its monkey games while it was headed by the former CEO Alexander Vinnick. A report by the Wall Street Journal showed that the crypto exchange was associated with about 70 percent of all criminal crypto cases in 2016 (although, to be fair, there’s a lot of criticism of these sorts of reports).
Vinnick’s dirty games caught up with him in summer 2017 when he was arrested for aiding money laundering. Following the arrest, Dmitry Vasiliev, the new ex-CEO, took over the cryptocurrency exchange and rebranded it as WEX.
Vasiliev’s tenure was short-lived, running for barely a year. Notwithstanding, Vasiliev’s short tenure was reportedly filled with shady businesses and lots of troubles. The 32-year-old Russian, who promised to rebrand the notorious BTC-e trading platform and refund the clients’ money, allegedly followed in the shady footsteps of his predecessor and on Friday landed himself an arrest in Italy.
WEX, which was launched in 2017 following the arrest of Vinnick, suddenly stopped trading in 2018, with the clients’ crypto coins and fiat currency trapped in the tragedy.
BBC report has it that Vasiliev planned on selling the crypto exchange to a militant fighter named Dmitri Khavchenko. Although Khavchenko reportedly bought the digital assets exchange and even changed the name to his daughter’s name Daria, it has since stopped all trading and withdrawals, leaving multiple clients wailing over their trapped funds.
$19 Million in Ethereum Transferred While Clients’ Crypto Funds Frozen
Following these events, Ethereum (ETH)trade worth about $19 million was transferred from the crypto exchange to another well-known exchange, Binance, within this time. Yet, clients were still unable to get their own funds. This led to an outcry on Twitter, which caused the management of Binance to freeze the cold wallet with the funds.
The drama escalated really quickly, with tons of people writing to the President of Russia to look into the case. Aggrieved clients also took the case to the police, filing numerous reports against the cryptocurrency exchange. The police then swung into action and investigated Vasiliev based on the reports filed.
Earlier this year (March precisely), findings from multiple investigations revealed that the brains behind the SamSam ransomware, Mohammad Mehdi Shah Mansouri and Faramarz Shahi Savandi, successfully used WEX to launder over $6 million collected as ransom payments from victims of the SamSam ransomware.
Vasiliev is yet in police custody, together with Vinnick who is currently facing extradition to the U.S., Russia, or France.