BTC-e Seized by the FBI

On July 25, BTC-e exchange, one of the oldest, frozed the price at the morning. All users were left without prior notice without being able to login on the web, without access to their funds and with their operations frozen. For his part, BTC-e from the oficial Twitter account reported an “unexpected maintenance” on their servers. After several hours without restoring the service, users reported a possible DDoS attack or even a hack, while btc-e did not deny or give explanations to the facts, only called the calm and reassured on Twitter.

 

BTC-e is a Russian exchange that has always been characterized by security and robustness. Operating since 2011 with a simple interface and easy registration with no documentation to identify the user, it allowed to buy and sell Bitcoin Litecoin Namecoin Ethereum among other Cryptocurrencies. It has never been suffered a hack before.

 


Tweet: https://twitter.com/btcecom/status/889809088208568322

 

The alarm went off when there were movements of the cold wallets of BTC-e on the same morning of July 25, on twitter circulated addresses coming from the exchange. Someone was massively withdrawing funds to multiple addresses. https://blockchain.info/address/1KA9Z7n6kBJMosZVP4AZprzUTEw6KchJtP

 

Tweet: tweet: https://twitter.com/Liveuamap/status/889961577398628353

 

We have also $ 147 million in Ether transferred to another direction, exactly this one.

 

ETH BTC-e Address  : 

https://etherchain.org/account/0x91337a300e0361bddb2e377dd4e88ccb7796663d

New ETH Address :

https://etherchain.org/account/0x8eb3fa7907ad2ef4c7e3ba4b1d2f2aac6f4b5ae6#txreceived

 

But what it was happening, they were being intercepted by the FBI while they arrested in parallel to an alleged ringleader of the Alexander Vinnik plot, charging him with a $ 4 billion money laundering offense. He was charged with money-laundering offenses related to Bitcoins stolen from the broken Mtgox along with a network of companies laundering money from ransomware viruses.  Info about imputation here

 

 

According to the information on the website; BTC-e is located in Bulgaria but subject to the legislation of Cyprus. On the other hand Canton Business Corporation Ltd is the portal management the company, located in the Seychelles islands registered with a Russian mobile phone.

 

 

Picture  of Alexander Vinnik: Giannis Papanikos/AP

 

The question is: Cold wallet movements BTC-e’s own employees to save part of their funds or it was the FBI confiscating them?

The trigger of this embargo is that virtually all payments of ransomware went to the exchange where they were made cash, as confirmed by the investigation of the hand of black hat where with the collaboration of several companies were tracking all payments made to the ransomware related virus.

 

 

From Bitcoiner.today we will continue informing of any movement for now we will have to be attentive to the updates of the official Twitter and their account in Bitcointalk from where they have explained the procedure that they are going to follow to try to reestablish the service and to return the funds of the users trapped.

 

In another statement BTC-e denies the relationship with the arrest of the Russian Vinnyk Alexander:
We officially declare – Alexander was never the boss or employee of our service.

Sincerely, btc-e

 

Updated 1 Date 31.07.2017

On July 25, 11:00 AM the FBI staff arrived at the data center where our server team was located and seized the entire team, the servers contained databases and purses of our service. In the next 1-2 weeks, we will evaluate and post information on how much money fell into the hands of the FBI and how much money is available for return.

Updated 2 Date 03.08.2017

We have been able to access our databases and purses, we are currently evaluating data and balances, this information will be made public before the end of next week.

We reaffirm that the main confiscated assets are those related to Mayzus Financial Services Ltd and for the moment are confiscated.

Update 3 Date 09.08.2017

The last 14 days we were struggling to take control of 55% of the funds, the remaining 45% are confiscated funds, mostly in fiat (EUR USD RUB). What is the possible solution to the current situation we see:
Working under the current BTC-e brand is not possible because of unresolved issues from the US Treasury’s Office of Financial Crimes. At the moment, we are negotiating with a group of investors (an investment company), about the purchase and the soon launch of the service and the payment of the debts to the clients. In addition, the process of repayment of debt obligations will be described in more detail. After transferring all the balance sheets of the investment company, we recalculate the balance sheets.

The conversion procedure, taking into account the available 55% of the funds will be:
1. All fiat obligations (USD, EUR, RUR) will be transferred to BTE chips (1 BTE = 1 USD)
2.If you have cryptos in the balance, then 45% of the balance of coins will be canceled and 45% in BTE token will be credited
(1 BTE is 1 USD). At the exchange rate of the conversion day.
3. If you have a balance in BTE, then you will be credited with 45% in cryptos (the amount will be divided into 7 different currencies, BTC, LTC, NMC, NVC, PPC, ETH, DSH) and will be canceled 45% in BTE Token.

After all the recalculations, all users will have the opportunity to withdraw 55% of their system funds.
The investment firm works in accordance with KYC, AML and the required licenses for this activity, so all users must be subject to verification.
The next update will provide more details on how to access your balance sheet information and when these funds can be withdrawn.

From the BTC-e team we officially reported that all funds that were in the reserve fund (including all our income) were transferred to pay off the debts incurred.

In short BTC-e will not be able to operate under the same brand, they are working to create another platform by making an ICO with tokens where it will distribute the remaining 45% of the debt among the users, who will later be able to sell those BTEs in the market.

Are you one of those affected by BTC-e? Share and comment!

Jaime Sanchez

Jaime Sanchez

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