BBC Investigation Hints at Russian Involvement in $450 Million Exchange Collapse
BBC Investigation Hints at Russian Involvement
A BBC investigation revealed that the collapse of Wex cryptocurrency exchange in 2018 had links with a Russian Involvement in the intelligence agency, the Federal Security Service (FSB). A co-founder of the popular cryptocurrency wallet and exchange revealed that he was under heavy pressure to hand over customers’ wallet details. He also claimed that the funds, which amounted to approximately $450 million, would go to FSB fund.
BBC Audio Recordings Unearth FSB Designs
BBC has obtained audio recordings of telephonic conversations, which throw light on the issue. In the tapes, Konstantin Malofeev can be heard discussing the significance of bringing Wex under FSB’s purview. Malofeev is a Russian billionaire upon who the US has placed sanctions for aiding pro-Russian forces in Eastern Ukraine.
The founder of Wex, Alexey Bilyuchenko, claimed that he was taken to FSB Moscow’s offices after the phone calls in April 2018. He handed over flash-disks that contained instructions regarding the right method for accessing customers’ online wallets. These wallets contained over $450 million worth of cryptocurrencies. The BBC investigation revealed that he received information that the funds would find their way to the FSB accounts. The Bitcoin price rose on the exchange three months after this episode following which the exchange finally shut down at the end of 2018.
Rising From The Ashes
Wex was launched in 2017 after the FBI brought down curtains on BTC-e exchange and arrested Alexander Vinnik. Bilyuchenko had founded the BTC-e exchange, which was under investigation for money laundering that had enabled the transfer of about $4 billion in illicit funds. The Russian Involvement hacking group, Fancy Bear, allegedly used these funds. This hacking group also had links to the US Democratic Party hack in the lead up to the 2016 US Presidential election.
Russian Legal Impediments to Legalizing Cryptocurrencies
Although the BBC investigation might suggest that Russia has no issues with cryptocurrencies, the current situation paints a different picture. There is no update regarding their legal status in the country. In July, relevant officials announced that cryptocurrencies were far from receiving monetary status anytime soon. In September, another news surfaced, which said that mined Bitcoin might come under taxation just like found treasure. It is evident that the crypto industry isn’t exactly flourishing in Russia either.
About The Author
Sandeep Kumar MishraSandeep is an avid cryptocurrency enthusiast and a keen & passionate blogger. He loves to keep track of the latest social media trends and other hot topics in the digital marketing space. Also, he has a knack for sharing crypto and blockchain-related updates with passionate readers like yourselves. You can follow him on LinkedIn and Twitter, too if you like his content.
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