10,000 BTC Moved From Former ‘Rogue Exchange’ BTC-E

On Wednesday, Nov. 23rd, a wallet that contained a major chunk of Bitcoin originally belonging to the former BTC-E, one of the oldest and most contentious Bitcoin exchanges, made its largest move since 2018, splitting 10,000 BTC among two wallets. According to Chainalysis’ blockchain forensics, 9,950 BTC are still in personal wallets, while the remaining 50 have been transferred to “two big exchanges.” At today’s values, the total amount shifted is close to $165 million.

Based in Bulgaria and dubbed a “rogue exchange,” BTC-E is best known for its involvement in helping to launder bitcoins stolen in the 2014 MtGOX hack. The exchange is also well-known for taking funds from darknet markets, breaches, and ransomware operations. It is estimated that $4 billion in illicit BTC passed through the exchange in its six years of existence, accounting for 95% of all ransomware payments made during this time.

Alexander Vinnik, the founder and owner of BTC-E, was detained while on vacation in Greece on July 25, 2017, at the request of US authorities, who assessed a $110 million penalty against his exchange. As a result, BTC-E, which had been in existence since 2011, was forced to close immediately. Vinnik was extradited to France after being imprisoned in Greece for 2.5 years and convicted of money laundering charges. He was extradited to the United States in August of this year after returning to Greece to face allegations of money laundering and operating an unauthorized money service business.

According to a Russian news outlet Lenta.ru research, the original Russian Anonymous Marketplace (RAMP) – Hydra’s predecessor and rival – stored a percentage of their organization’s funds on BTC-E, along with approximately $60 million in vendor payments. Following Vinnik’s imprisonment, a major percentage of these monies were confiscated, leaving RAMP in a financial bind from which they were unable to recover. The takedown of BTC-E is expected to be the ultimate blow to RAMP, one of Russia’s original darknet markets, which was already damaged by continuing cyber-warfare with Hydra.

Aside from collecting payments through RAMP, BTC-E was also the preferred exchange for a merchant who discovered a withdrawal exploit in Sheep Marketplace, another early darknet market that started in March 2013. In December 2013, around 5,400 BTC were stolen from the market, worth at approximately $6 million at the time, some of which made its way to a BTC-E deposit wallet. The operations were halted, and its website was removed later that month.

Vinnik has maintained his innocence on all counts against him since his arrest in 2017.

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