BTC-e is (or was, as remains to be seen) an internet-based cryptocurrency exchange platform that allows people to trade in Bitcoins and other virtual forms of currency; one of the biggest and most widely known exchanges of its kind in the world.
Shockwaves have been resounding throughout the community since last week, however, when the site was taken down, soon to be followed by news that they were being hit with a $110 million fine for their part in facilitating ransomware, wilfully violating anti-money laundering laws, and a range of related crimes, including hacking, identity theft, tax fraud, corruption and drug trafficking.
The plot thickens
Shortly after BTC-e went down, news broke about the arrest of a 38-year-old Russian man, Alexander Vinnik, since suggested to be an admin of the site, for leading a money laundering operation involving more than $4 billion. Bitcoin security specialists, WizSecurity, quickly announced that in addition to these crimes, he is now also their ‘chief suspect’ in the ongoing investigation into the prior hacking and ultimate downfall of Mt Gox, a former leading name in cryptocurrency exchanges, suggesting that whilst he may not have been the actual hacker, he is thought to have bought cheap, stolen coins and laundered them illegally, thus fuelling further illegal activity. The nature of Mt Gox’s bankruptcy had until now remained a mystery, leading many to suspect that Vinnik could prove at last to be the crucial piece of the puzzle in finally understanding what happened.
What does it mean for the future of BTC-e and cryptocurrency?
When the site first went down, tweets from BTC-e’s account stated in both English and Russian that the interruption to their service was due to ‘unplanned maintenance’, and that they aimed to be up-and-running again within 10 days. However, the domain has since been officially seized by authorities, throwing up a lot of uncertainty as to what this means for their users, and sure to leave many of them in fear of lost investment. In response, BTC-e released a statement, denying Vinnik’s links to the site and vowing to return funds once they regain control of their servers from the FBI, promising further updates within the next two weeks.
What this high-profile case could mean for the future of cryptocurrencies in general also remains to be seen. Recent predictions from experts say that despite problems with their reputation with regards to their links to crime, cryptocurrencies are here to stay, with big names sure to stick around but the emergence of new players that could rival them very much a possibility. They went on to say that more investors are likely to get burned as in this instance, whilst increasing moves are made towards stricter levels of regulation in conjunction with banks; no doubt in an aim to provide existing and would-be users with greater confidence in where they’re putting their money, to try and prevent harmful cases like this one from happening again.