After a year of near dormancy, Bitcoin funds from rogue exchange BTC-e are moving again. Chainalysis, an American blockchain analytics company headquartered in New York City, is report that 10,000 BTC, worth approximately $165 million, have been transferred.
The destination of the transactions are personal wallets, money exchange 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 played a major role in money laundering for ransomware attacks.
Like NewsBTC reportedsecurity researchers estimate that BTC-e was responsible for 95% of all ransomware payments and their conversion to fiat currencies.
Russian citizen and BTC-e co-founder Alexander Vinnik is also believed to have been involved in the theft of 530,000 of the more than 800,000 Bitcoins stolen Mountain Gox. After serving two years in prison in France, Vinnik was extradited to the US in August.
As Chainalysis points out, BTC-e still held a significant amount of Bitcoin at the time of its 2017 shutdown. In April 2018, BTC-e moved more than 30,000 Bitcoin from its service wallet. About $50 million of that went to the now-sanctioned OTC counter Suex.
BTC e-fraudster about to dump his bitcoin?
Since then, the masterminds of the fraudulent exchange have been relatively quiet. As recently as October 2021, BTC-e sent more than 100 Bitcoin worth more than $6 million to personal wallets and eventually to various 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 BTC-e fraudsters started withdrawing cryptocurrencies already a month ago. On October 26, both BTC-e and its successor 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 seemingly being successful, BTC-e pulled out of yesterday’s big move.
Chainalysis concluded that approximately 9,950 Bitcoin remained in the fraudsters’ personal wallets, “while the remainder was moved through a series of intermediaries to four deposit addresses on two major exchanges. In the case of Exchange 1, pictured above, our analysis suggests a Russian exchange may have served as a middleman to launder this BTC e-money.”
Ki Young Ju, CEO of CryptoQuant, confirmed that the BTC comes from the criminals involved in the Mt. Gox hack from 2014. “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 belongs to criminals, like most old Bitcoins. It is the BTC e-exchange wallet associated with the Mt. Gox hack from 2014.
They sent 65 BTC to @hitbtc a few hours ago, so it’s not a government auction or anything.https://t.co/6LnCxFAJfX https://t.co/YdPrvJafxY pic.twitter.com/Sp2higUqbq
— Ki Young Ju (@ki_young_ju) November 24, 2022
So in the short term, the BTC e-fraudsters don’t seem to be a threat as they are once again dumping only smaller amounts of BTC. Bitcoin price, meanwhile, is struggling with the crucial $16,000 USD resistance.