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The former CEO of the crypto exchange WEX, which stopped its operations last year, has been arrested in Italy, Russian BBC outlet reported.
Two anonymous exchange investors informed BBC about the arrest of Dmitri Vasilev. As of now, neither the Russian embassy in Italy nor the Guardia de Finanza, the finance guard of the country, is willing to say anything on the matter.
WEX is the successor of BTC-e, a cryptocurrency exchange which came under regulatory scrutiny back in 2017 for allegedly willfully violating Anti-Money Laundering (AML) laws. Russian national Alexander Vinnik, one of the purported operators of BTC-e, was arrested in Greece that year and is now facing extradition to Russia, France, or the United States.
Launched in 2017 by Vasilev, WEX carried out its operations for almost a year during which it reportedly credited customers with lost funds - 60% in original currencies and 40% in debt tokens.
However, problems soon started appearing and the exchange froze withdrawals in July 2018, CoinDesk reported. Vasilev reportedly sold the exchange last year to Dmitri Khavchenko, a Ukrainian militia fighter. who then named his daughter Daria as the official owner of the exchange.
Speaking to CoinDesk last year, Khavchenko had said that the administrator of WEX did not like him as the new owner and ran away with the keys. Meanwhile, around $19 million worth of ether was reportedly moved from WEX's cold wallets during the summer and fall of 2018 to Binance.
Binance CEO Changpeng Zhao later announced in October that the said WEX accounts have been frozen.
the identified accounts are frozen, please report to law enforcement and have a case number. We will work with LE. This is part of centralization we hate too, dealing with other exchange's mess (we don't even know the details). But we will do what we can. https://t.co/tgyYI5ptqx
— CZ Binance (@cz_binance) October 30, 2018
It is important to note here that the identities of the team behind BTC-e remain unknown. Vinnik, who is believed to be the owner of BTC-e by American authorities, claims that he was only a technical specialist and was neither the administrator nor the owner of BTC-e.
WEX, for its part, has been reportedly used by Faramarz Shahi Savandi and Mohammad Mehdi Shah Mansouri – the people believed to be behind the SamSam ransomware – for laundering more than $6 million obtained in ransom payments.
A noteworthy aspect to this case is that investors actually wrote to Russian President Vladimir Putin asking him for justice. The open letter has been reportedly passed on to the Russian police headquarters.
