Dump incoming? Rogue BTC-e Moves $165 Million in Bitcoin
After a year of near dormancy, the Bitcoin funds of rogue exchange BTC-e are back on the move. Chainalysis, an American blockchain analytics firm headquartered in New York City, is reporting that 10,000 BTC, worth around $165 million, has been transferred.
The destination of the transactions are personal wallets, exchange deposit addresses and other services. Remarkably, the transfer is the largest withdrawal since April 2018.
BTC-e was a crypto exchange founded in July 2011 and shut down 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 ransom attacks.
As NewsBTC reported, security researchers estimated that BTC-e was responsible for 95% of all ransom payments and their conversion to fiat currencies.
Russian citizen and co-founder of BTC-e, Alexander Vinnik, was also allegedly involved in the theft of 530,000 of the more than 800,000 Bitcoins stolen from Mt. 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 shutdown in 2017. In April 2018, BTC-e moved more than 30,000 Bitcoin from the service wallet. About $50 million of this went to the now-sanctioned OTC counter Suex.
BTC-e scammers about to dump Bitcoin?
Since then, the masterminds of the fake exchange had been relatively quiet. As early as October 2021, BTC-e sent over 100 Bitcoin worth more than $6 million to personal wallets and eventually to several exchanges “serving 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 fraudsters of BTC-e 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 conducted a test by indirectly transferring 100 Bitcoin to an exchange. After being successful, BTC-e pulled yesterday’s big move.
Chainalysis concluded that approximately 9,950 Bitcoins remain in the fraudsters’ personal wallets, “while the remainder was moved through a series of intermediaries to four deposit addresses at two major exchanges.” In the case of Exchange 1, pictured above, our analysis suggests that a Russian exchange may have acted as an intermediary to launder this BTC-e money.”
CryptoQuant CEO Ki Young Ju confirmed that the BTC originated from criminals linked to the 2014 Mt. Gox hack. “They sent 65 BTC to Hitbtc a few hours ago, so it’s not a government auction or anything,” he said. Ju urged the exchange to suspend the account due to suspicious activity.
7-year-old 10,000 $BTC moved today.
No surprise, it’s from criminals, like most of the old Bitcoins. It is the BTC-e exchange wallet related to the 2014 Mt. Gox hack.
They sent another 65 BTC @hitbtc a few hours ago, so it’s not a government auction or anything. pic.twitter.com/Sp2higUqbq
— Ki Young Ju (@ki_young_ju) 24 November 2022
In the short term, the BTC-e fraudsters do not appear to be a threat, as they again only dump smaller amounts of BTC. The Bitcoin price, meanwhile, is struggling with the crucial $16,000 USD resistance.
