Dmitri Vasilev, the previous CEO the now defunct crypto exchange WEX, was arrested Friday in Italy, the BBC’s Russian Service documented.
The publication cites Vasilev’s acquaintance and two nameless buyers in WEX who informed BBC about the arrest. The attaché of the Russian embassy in Italy, Dmitri Gurin, declined to give any specifics, as did the Italian financial law enforcement (Guardia de Finanza).
WEX was launched in 2017 as a successor of also defunct exchange BTC-e, whose alleged operator, Alexander Vinnik was arrested in 2017 in Greece and now struggling with extradition to the U.S., France or Russia.
The yr of frozen money
WEX was launched by Russian citizen Vasilev and operated for a yr, until it froze withdrawals in July 2018 and has not restored standard service at any time due to the fact. The troubles begun quickly following Vasilev attempted to promote WEX to Dmitri Khavchenko, a militia fighter in the war in Japanese Ukraine.
Khavchenko informed CoinDesk last yr that WEX’s admin (who, like the relaxation of the help crew, was nameless) did not like him as the new owner and disappeared with the keys.
He also said at the time that the invest in deal was total. Khavchenko later on changed the formal owner of the Singapore-registered exchange to his daughter, Daria, he also informed CoinDesk.
In the meantime, more than the summer months and drop of 2018, nearly $19 million well worth of ether moved from the exchange’s cold wallets to the common crypto exchange Binance.
Responding to the outcry on Twitter, Binance CEO CZ said that WEX’s accounts on Binance experienced been frozen. The destiny of those people money is unclear due to the fact then.
Law enforcement step in
Buyers, typically from Russia and neighboring nations around the world, who ended up unable to get again their crypto and fiat deposited with WEX, begun filing law enforcement reports in the drop of 2018. In accordance to BBC, the Kazakhstan national law enforcement begun a legal investigation of Vasilev based on 1 these report, as effectively as the law enforcement of the Russian city of Tolyatti, which begun a different preliminary investigation.
The users even wrote an open letter to Russia’s president Vladimir Putin, inquiring for justice and their funds again, the Russian crypto media web site Forklog documented in April. The users ended up notified that the letter was then passed to Russian law enforcement headquarters.
In March of this yr, the auditing agency PwC documented that two Iranian citizens, Faramarz Shahi Savandi and Mohammad Mehdi Shah Mansouri, who are said to have made the SamSam ransomware, experienced been employing WEX to launder more than $6 million collected in ransom payments.
BTC-e was before connected to the theft of bitcoin from the storied crypto exchange Mt.Gox. In accordance to a Wall Road Journal report, “BTC-E appeared in 60 to 70 % of all legal cryptocurrency conditions by way of 2016.” Both BTC-e and WEX ended up sluggish to introduce know-your-client treatments and experienced nameless help groups.
Image of Dmitrii Vasilev, ex-CEO of the crypto exchange WEX, via YouTube