In Russia, suspect detained over embezzlement of WEX cryptocurrency exchange assets.

In the Moscow region, a suspect in the embezzlement of a co-owner of an unnamed cryptocurrency exchange was detained with suitcases of cash. The press service of the Ministry of Internal Affairs reports.

According to investigators, the suspect controlled the movement of large sums in cryptocurrencies and their transfer to electronic wallets. Taking advantage of his position, he withdrew part of the funds and misappropriated them.

At the time of arrest the suspect had two suitcases containing 190 million rubles. An open criminal case has been opened for embezzlement of the exchange’s assets.

Law enforcement conducted 29 searches at premises owned by the defendant and his alleged accomplices in Moscow, Saint Petersburg, Novosibirsk and Yalta. More than 50 million rubles, $1 million, €70,000, expensive computer equipment, hardware wallets, items of luxury and documents were seized.

The detainee has been remanded in custody, an asset freeze has been placed on his accounts. A request to arrest assets worth more than 2 billion rubles has been sent to court.

Recall that the WEX cryptocurrency exchange is the successor to the BTC-e trading platform.

In the summer of 2017, WEX bought BTC-e client accounts after the latter’s closure and account seizures. WEX assumed BTC-e’s debt obligations and by April 2018 paid 20% of the total amount.

In July 2018 the deal transferring ownership to Havchenko moved to the final stage. Later Havchenko registered the exchange’s official operator — the Singaporean company World Exchange Services — under his daughter Darya.

In August of that year, the exchange’s bankruptcy and halt of operations were announced. A clients’ initiative group estimated losses exceeded $400 million. Vasilyev is personally attributed with $200 million withdrawn.

In November 2019 the BBC reported that a Russian entrepreneur, the owner of the Tsargrad media group Konstantin Malofeyev, was involved in the purchase of WEX and subsequent withdrawal of funds.

According to the incriminating testimony of the WEX ‘red admin’ Alexey Biluchenko, user funds were coerced under threat to be transferred to the personal wallets of FSB officers, notably Anton Nemkin.

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