BTC-E has long been a recognized as an exchange with shady beginnings. No one publically came forward as running it, there was uncertainty about it’s location, among many other issues. In a long string of exposing events, the US federal governments and several agencies have seized the domain.
Federal Probe into Alleged Exchange Founder Alexander Vinnik
BTC-E claims that Vinnik is “officially declare – Alexander was never the head or employee of our service.”, directly negating the claims of the US Justice Department that states that Vinnik was in fact the operator of the exchange. A $110 million dollar fine has been levyed against Alexander for his accused crimes by FinCEN.
Reports Claim BTC-E Tied to Stolen Mt. Gox Funds
The U.S. Department of Justice believes the purported owner of the exchange, Alexander Vinnik, utilized BTC-E to launder billions of dollars worth of bitcoin since 2011. Feds believe he played a role in the theft of more 800,000 bitcoin at Mt. Gox worth about $400 million at the time. According to the indictment, 530,000 of those Bitcoin ended up passing through wallets controlled by or associated with Vinnik. His role in the larger scheme remains unclear at this time.
What Will Happen to User’s Funds?
From our understanding, the site is no longer accessible to users of the exchange. There are several updates coming from BTC-E on Twitter, referencing bitcointalk.org threads, and other sites, such as this one (update 6). The latest updates states that users will be entitled to a token representing the loss of their funds.
BTC-E is claiming that 55% of all deposits are available, but the remaining 45% will be credited to user’s accounts via a token. This is similar to what Bitfinex did during their hack, but BTC-E is under investigation for several crimes. Cointelegraph reports that the FBI has gained control of BTC-E’s bitcoin wallets.
Is this the Death of BTC-E?
Despite, all this it seems that BTC-E is neither denying nor accepting the claims sent against them. BTC-E maintains innocence and is attempting to retain it’s customers. Once BTC-E seized was seized by various USA Federal agencies, they will continue their business another way. They are doing this by attempting to restart the site via a .onion or tor/dark-net visible site only.
This is an exciting development and Cryptocrooks will stay on alert for BTC-E updates. Subscribe to our email list for updates and special offers!