BTC-e ‘Reopens’ and Promises Withdrawals, but There’s a Catch
As it announced previously, exchange BTC-e has “reopened” at a new domain, and said users can begin withdrawing funds starting 2nd September. However there are conditions — users will have to agree to keep 45 percent of their balances in “debt tokens” if they wish to ever receive the full amount.
Users wishing to continue using the exchange may need to verify their accounts according to European KYC/AML regulations. Given that BTC-e’s previous non-compliance with these regulations was one of its main selling points, it will be interesting to see how many opt to continue.
The original domain was reportedly seized in a joint operation by six U.S. federal government agencies in July. FinCEN has levied multi-million dollar civil financial penalties against the site and its alleged operator for money laundering.
BTC-e Fulfills Promise to Reopen From 1st September
BTC-e’s account on the BitcoinTalk forums had previously announced the site would reopen in some form or other on 1st September. A site featuring the same design and account records is now live at BTC-e.nz, a New Zealand domain.
Users can log in using their old credentials to view their balances (the site requires them to reset passwords). The site’s infamous “trollbox” live chat is also active.
The ability to withdraw 55 percent of digital asset balances will begin 2nd September. Users wishing to withdraw their assets immediately must agree to forfeit debt obligations to the remaining 45 percent, which BTC-e will record as “debt tokens”.
The use of debt tokens is similar to the way Bitfinex handled its own loss of funds after a hack in 2016. While the company claimed users have now been paid back in full, the process was criticized for being opaque.
Three-Stage Relaunch and KYC Compliance
BTC-e’s relaunch will happen in three stages, the BitcoinTalk account said. From now to 15th September, the “old” BTC-e business entity will transfer its assets and user data to a new licensed financial investment company.
The new company will be “in full compliance with the European directives on personal data and in compliance with European legislation in this field,” it said.
In the second and third stages, the new company will confirm records of all customers’ digital assets and “audit and register personal data in accordance with AML laws and KYC identification procedures”.
It’s not clear whether any identification is required to withdraw digital assets, though if withdrawals are to begin on 2nd, that appears unlikely. Users wishing to claim anything above the 55 percent mark after 15th are more likely to require account verification.
The company also claimed it was under pressure from U.S. authorities to comply with regulations. A full restoration of services under its previous semi-anonymous conditions was never likely.
Even though all updates on BitcoinTalk since the “seizure” have been in Russian, the site itself has information translated to English.
Bitsonline advises any BTC-e account holders to first test logging in with incorrect credentials, to verify the new site is not a password phishing attempt. One user told us, however, the site accepted only his genuine account password — and is trustworthy on that level at least.
Bitsonline will continue to monitor this developing story and provide updates.
What do you think of BTC-e’s “reopening”? Let’s hear your thoughts.
Images via BTC-e, Pixabay