Wednesday, February 8, 2023

$100 Million in ETH Moved From BTC-e Wallets, but to Where?

$100 Million in ETH Moved From BTC-e Wallets, but to Where?

Anxious BTC-e account holders are even more concerned today, after noticing a 485,705 ETH transaction from a wallet belonging to the exchange. It’s still unclear who has control over BTC-e wallets, after alleged operator Alexander Vinnik’s arrest last week.

Also read: Bitcoin Crime and Punishment: Who’s Looking After the Users?

The ether funds, worth around $100 million USD at current prices, went to an unknown destination.

BTC-e logoWhile there were some reports the BTC-e domain had been seized by U.S. authorities, attempts to access the site now result in a 522 error or security warning. The exchange first went offline on 25th July, for “unscheduled maintenance”.

BTC-e account holders, most of whom were likely not money launderers, have expressed outrage at the prospect of seized funds.

These customers have dual concerns, neither of which is promising. One is that a U.S. government agency has seized the funds, regarding them as lawfully seized criminal proceeds. Language in a Department of Justice statement a few days ago reflects that used for dark net market places, calling BTC-e an “illegal business”. FinCEN has already handed the company a $110 million USD civil penalty.

How Can BTC-e Return at This Point?

The second concern is: even if BTC-e operators still control the account funds, will they or can they return them? Administrators other than Vinnik remain unknown to the general public.

Putting a functioning exchange back online, simply to allow withdrawals, creates additional risk without much economic benefit. There would also be risk for account holders, whose receiving addresses would no doubt be under increased scrutiny — and who may not trust the site enough to enter their login credentials any more.

Already, some have been targeted with phishing emails. Bitsonline warns users not to send funds to any address promising these fake “services”

BTC-e’s official Twitter account hasn’t posted since 27th July. The last post, in Russian, claimed it would be offline for 5-10 days. Its last English language post was on the 26th, saying the unscheduled maintenance was “ongoing”. At the time, BTC-e’s domain still displayed the company logo (and the tweets).

The exchange, which has operated since 2011, held balances in BTC, ETH, LTC, DASH, and old-time favorites novacoin and namecoin. Fiat currencies included USD, EUR and Russian roubles. Needless to say, the status and location of fiat balances is also unknown.

Do account holders have any chance of seeing their money again? Let’s hear your thoughts.

Images via Twitter, Pixabay

Bitsonline Email Newsletter