Dump Incoming? Rogue BTC-e Is Moving $165M in Bitcoin


After a year of near-dormancy, Bitcoin funds from the rogue exchange BTC-e are on the move again. Chainalysis, an American blockchain analytics company headquartered in New York, is reporting that 10,000 BTC, worth about $165 million, had been transferred.

The purpose of the transactions are personal wallets, exchange deposit addresses and other services. Notably, the transfer is the biggest withdrawal since April 2018.

BTC-e was a crypto exchange that was founded in July 2011 and closed in 2017 as a result of a joint investigation by the US Secret Service and the FBI. According to the allegations, BTC-e was instrumental in laundering money for ransomware attacks.

As NewsBTC reported, security researchers estimated that BTC-e was responsible for 95% of all ransomware payments and their conversion to fiat currencies.

Russian citizen and co-founder of BTC-e, Alexander Vinnik, is also believed to have been involved in the theft of 530,000 of the more than 800,000 Bitcoin stolen from Mount Gox. After serving two years in prison in France, Vinnik was extradited to the United States in August.

As Chainalysis notes, BTC-e still held a significant amount of Bitcoin at the time of its suspension in 2017. In April 2018, BTC-e moved more than 30,000 Bitcoin from its service wallet. About $50 million of that went to the now-approved OTC counter Suex.

BTC-e Scammer About To Dump His Bitcoin?

Since then, the masterminds of the fraudulent exchange have been relatively quiet. In October 2021 alone, BTC-e sent more than 100 Bitcoin worth more than $6 million to personal wallets and eventually to several exchanges “that serve Russia and other Eastern European countries,” according to Chainalysis.

Yesterday’s transaction appears to be the tip of the iceberg and a longer planned move. The BTC-e fraudsters started withdrawing cryptocurrencies already a month ago. On October 26, both BTC-e and its successor exchange WEX sent small amounts of Bitcoin to Webmoney, a Russian electronic payment service.

Then, on November 11, BTC-e made an attempt by indirectly transferring 100 Bitcoin to an exchange. After seemingly being successful, BTC-e made a big move yesterday.

Bitcoin BTC-e
BTC e-transaction as built by Chainalysis. Image: Chainalysis.com

Chainalysis concluded that approximately 9,950 Bitcoin remained in the fraudsters’ personal wallets, “while the rest was moved through a series of intermediaries to four deposit addresses at two large exchanges. In the case of Exchange 1, presented above, our analysis suggests that Russian exchange may have served as an intermediary to launder this BTC e-money”.

CryptoQuant CEO Ki Young Ju confirmed that the BTC originated from the criminals linked to the hack of Mt. Gox since 2014. “They sent 65 BTC to Hitbtc a few hours ago, so it’s not a government auction or anything,” he said. Ju prompted the exchange to suspend the account due to suspicious activity.

Thus, in the short term, the BTC e-fraudsters do not seem to be a threat, as they are again only dumping smaller amounts of BTC. The price of Bitcoin, meanwhile, is struggling with the crucial resistance at $16,000 USD.

Bitcoin faces crucial resistance at $16,600 on the 15-min chart. Source: TradingView



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