Dump Incoming Calls? Rogue BTC-e Moves $165 Million in Bitcoin

After a year of near dormancy, rogue exchange BTC-e’s Bitcoin fund is back on the move. Chainalysis is an American blockchain analytics company headquartered in New York City. report 10,000 BTC worth about $165 million was transferred.

Transaction destinations are personal wallets, exchange deposit addresses, and other services. Surprisingly, this transfer is the largest withdrawal since April 2018.

BTC-e is a cryptocurrency exchange founded in July 2011 and closed in 2017 following a joint investigation by the US Secret Service and the FBI. Allegedly, BTC-e was laundering money due to ransomware attacks.

As reported by NewsBTC, security researchers estimate that BTC-e is responsible for 95% of all ransomware payments and fiat currency conversions.

Russian citizen and BTC-e co-founder Alexander Vinnik has also been implicated in the theft of 530,000 of the over 800,000 bitcoins stolen from Mt. Gox. After serving two years in France, Vinnik said he was extradited to the United States in August.

As noted by Chainalysis, BTC-e still held a large amount of Bitcoin when it closed in 2017. In April 2018, BTC-e moved over 30,000 Bitcoins from his service wallet. About $50 million of that went to the now licensed OTC counter Suex.

BTC-e Scammers About to Dump Bitcoin?

Since then, the rogue exchange mastermind has been relatively quiet. According to Chainalysis, it wasn’t until October 2021 that BTC-e sent over 100 bitcoins worth more than $6 million to his personal wallet, eventually ending up in “Russia and the rest of Eastern Europe.” Sent to several exchanges that serve countries.

Yesterday’s trade was just the tip of the iceberg and appears to be a planned move for the longer term. The BTC-e scammer started withdrawing cryptocurrencies as early as a month ago. On October 26, both BTC-e and its successor exchange WEX transferred a small amount of bitcoin to Russian electronic payment service Webmoney.

And on November 11th, BTC-e conducted a test to indirectly transfer 100 bitcoins to an exchange. After seemingly successful BTC-e has pulled off yesterday’s big move.

Chainalysis concluded that around 9,950 bitcoins remained in the crooks’ personal wallets. For Exchange 1 above, our analysis suggests that a Russian exchange may have acted as an intermediary for this BTC-e-money laundering.

CryptoQuant CEO Ki Young Ju has confirmed that the BTC came 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 like that,” he said. Ju asked the exchange to suspend his account for suspicious activity.

7 years old 10,000 $BTC I moved today.

Naturally, it comes from criminals, like most old Bitcoins. BTC-e exchange wallet associated with the 2014 Mt Gox hack.

They gave 65 BTC @hitbtc It’s a few hours ago, so it’s not a government auction. 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, BTC-e scammers do not appear to be a threat as they are dumping only a small amount of BTC again. Bitcoin’s price, meanwhile, is struggling against a critical resistance at US$16,000.