BTC-e was described as "one of the largest and most widely used digital currency exchanges in the world" when it was seized by U.S. law enforcement in 2017. It is also one of the most notorious.
Since BTC-e was founded six years ago, billions of dollars in bitcoin and other digital currencies have flowed through this exchange. But this was before one of its so-called founders, Aleksandr Vinnik, was arrested on a Greek beach in 2017 under a U.S. arrest warrant. The following year, Special Adviser Robert Mueller released precise evidence alleging how Russian military intelligence agencies used bitcoin transactions to cover up interference in the 2016 US presidential election.
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Earlier this month, a new understanding of the shadow world of cryptocurrencies emerged in the BBC Russia Services Report, which provided more evidence on how Russian spies and Bitcoin exchanges like BTC-e tangled together.
"At least, cybercriminals often use BTC-e for money laundering, so it's natural for Russian intelligence agencies to purchase hard-to-trace funds," said Kim Nilsson, a Tokyo-based programmer who helped solve BTC- E-related mass Bitcoin theft is known.
Nilsson told RFE / RL: "Russia is particularly interested in Vinnik's extradition, which may indicate that some important senior figures may have been involved in BTC-e, even if not the Russian intelligence service itself."
BTC-e is a large online marketplace for buying and selling bitcoin and other cryptocurrencies, and even two years before it was confiscated by the United States, it will attract the attention of researchers, analysts and law enforcement officials.
Since its establishment in 2011, BTC-e's business model was co-founded and operated by Vinnik and partner Aleksandr Bilyuchenko. Its business model relies heavily on criminal underworld and people interested in anonymous or hard-to-track transactions. entity.
Its website description shows that BTC-e is located in Bulgaria but is located in both Cyprus and Seychelles.
A researcher tracking blockchain transactions (essentially the underlying technology that makes cryptocurrencies work) estimates that as of 2016, as many as 70% of all cryptocurrency crimes worldwide involved BTC-e.
These included the theft of about $ 400 million in cryptocurrency at current prices by Mt.Gox, a larger, earlier cryptocurrency exchange based in Tokyo. The Mt.Gox theft, mainly discovered by Nilsson and colleagues in 2014, is by far the largest theft involving cryptocurrencies and has caused Mt. Gox to go bankrupt.
Investigators later discovered that between 2011 and 2014, BTC-e processed transactions of stolen funds from Mt.Gox.
Three years after the collapse of Mt.Gox, on July 24, 2017, Vinnik was arrested on a beach in Greece, where he was on vacation with his family. When Vinnik was detained by U.S. agents, he was charged with 21 money-laundering and other related charges and logged into his BTC-e account via a mobile phone.
According to the U.S. Department of Justice, Vinnik, 39, is known as the curator of this international money laundering program, which has processed more than $ 4 billion in cryptocurrency transactions, including Bitcoin from Mt.Gox.
After his arrest and the cancellation of the U.S. extradition order, Russia filed a court order in Greece in an attempt to get Vinnik back to Russia, where he was allegedly facing charges in some small-scale fraud cases. Eating, France also later submitted its own extradition order.
Two years after his arrest, on July 25, 2019, US prosecutors filed another lawsuit against Vinnik and BTC-e to withhold about $ 100 million from a frozen BTC-e account suspected of violating U.S. banking laws.
At the time of writing, Vinnik is still in a Greek prison, awaiting a final ruling by the Greek authorities on where to send him.
"Perceptual Anonymity of Cryptocurrencies"
On July 13, 2018, nearly a year after Vinnik's arrest, the first of two U.S. indictments was unveiled, accusing 12 officials of the Russian military intelligence service for conspiring to interfere in the 2016 U.S. political system and Other efforts. The first was brought by White House Special Adviser Mueller. The second was released in October by US prosecutors in Pennsylvania.
The indictment contains, among other things, accurate identification of the alleged Russian intelligence agency GRU, including a group of hackers informally known as Fancy Bear.
The prosecutor wrote: "To facilitate the purchase of infrastructure for hacking, the defendants conspired to launder more than $ 95,000 in cash through online transactions designed to take advantage of the anonymity of cryptocurrencies such as Bitcoin."
The indictment also provided details about the Bitcoin transactions allegedly used by the agents.
Tom Robinson, a scientist at London-based research firm Elliptic Enterprises, examined the specific transaction and concluded in a report released 11 days after the first indictment was issued that there was a close relationship between GRU agents and BTC-e Connection.
However, he did not draw a direct connection.
Successor to BTC-e
Within a few days of BTC-e's closure, Bilyuchenko, one of BTC-e's partners, was the first to launch a new cryptocurrency exchange in Russia. Dmitry Vasilyev, another person who regularly trades cryptocurrencies on BTC-e, was also involved.
Like BTC-e, an exchange called Wex processes hundreds of millions of dollars in digital currency transactions.
According to the BBC Russia Service Network, a few months after its establishment, in early 2018, about $ 400 million in cryptocurrencies on the exchange went missing, after which the exchange closed. Russian Wex users who were unable to use their Wex filed a complaint with Russian law enforcement.
Before Wex closed, Bilyuchenko and Vasilyev had been looking for investors and customers who could help stabilize the exchange and provide some protection for Russian security agencies, a common business practice called "roof".
According to the BBC, one of Bilyuchenko's contacts with Vasilyev was a wealthy Russian businessman, Konstantin Malofeyev, known for his links with the Kremlin and his advocacy for conservative and nationalist causes . The United States imposed financial sanctions on Malofeyev in 2014 as he supported a Russian-backed battle against separatists in eastern Ukraine.
Bilyuchenko later testified to police investigators that officials from the Federal Security Service (FSB), Russia's main domestic spy agency, had been contacted during negotiations with Malofeyev.
In April 2018, Bilyuchenko testified that a person named Anton asked him to surrender assets of the cryptocurrency exchange Wex, who said that the cryptocurrency would "transfer to the account of the Russian FSB". Bilyuchenko later stated that he was imprisoned until he agreed to transfer $ 450 million in cryptocurrency.
The BBC also released a recording of the alleged telephone conversation between Bilyuchenko and Malofeyev in the summer of 2018. In the recording, a person believed to be Malofeyev accused Bilyuchenko of not transferring some of these funds.
"In the process, all participants were very skeptical that your [funds] invested more than the exchange. The fact that you are bundled with BTC-e is obvious, but on BTC-e, it has far less funding Far more than Wex. "
Said the man in the recording. "Because I say you are my person, I have been responsible to you."
Neither Vasliyev nor Bilyuchenko's whereabouts can be determined immediately.
According to the BBC, Vasliyev sold his stake in Wex to a man who was famous among Russian-backed militia in eastern Ukraine at the end of 2018. Vasliyev was arrested in Italy in July 2019, but he was released the same month.
An email to the news service of Marshall Capital, Malofeyev's main investment company, was not immediately answered.
Not just money laundering?
Over the years, researchers and analysts have concluded that Russian spies, FSB and GRU, are using cryptocurrencies and the services provided by their exchanges to raise money for operations.
At present, at least in public, there is little evidence of conviction to directly reveal the flow of funds, which has aroused great interest from US intelligence agencies.
Washington DC researcher Tim Cotten said there are signs that U.S. authorities' intelligence on cryptocurrency transactions far exceeds the information implied in the 2018 indictment.
He wrote in a blog post in April 2019: "There is no doubt that as the owner of the confiscated BTC-e, the U.S. government owns more than through simple blockchain analysis (where, when and where to use (Who used the funds) collected much more data. "
Cotten did not respond to emails seeking further comment.
Nilsson noted: "We are all seeing signs from the U.S. intelligence community that Russian intelligence personnel are proficient in the cryptocurrency used in their operations, so it is not surprising if they are also involved behind the scenes."
Court documents in the Vinnik case suggest that one of the reasons why the legal struggle for extradition is so difficult may be because of his potential value as an intelligence asset-the ability to provide detailed information on the internal operations of BTC-e and the use of it by agencies .
Louis Goddard, a data investigator for Global Witness, a London-based corruption watchdog, recently revealed in a report that a London financial company has a relationship with BTC-e. The author of the report said he has not seen evidence that the alleged operator of BTC-e has a relationship with Russia.
However, "In Aleksandr Vinnik's extradition dispute, the two sides have arrived—including separate criminal and civil lawsuits in the United States, and Vladimir Putin himself reportedly lobbying the Greek government, This raises the question that this case is not limited to money laundering, "Goddard told RFE / RL.