BBC Russia has it that former Wex Exchange (formerly BTC-E) operator Dmitry Vasilyev has been detained in Italy.
Some may recall the curious price discrepancies on Wex not so long ago, which raised red flags across the industry.
The belief was that the exchange wanted to attract deposits to capture money for nothing. Once the deposits were made, it was believed, withdrawals would be held up – this is the reason for the higher price, as people expect to be able to cash out a higher rate.
In general, it makes no sense for one exchange to have a remarkably higher price on a given asset than any other. The arbitrage opportunity is usually too apparent for traders.
Vasilyev is allegedly tied to BTC-e, one of the oldest exchanges and biggest scandals in the history of Bitcoin. BTC-e operators were alleged to have taken part in defrauding Mt. Gox, serious accusations which have yet to be settled out in court.
In the early days of Bitcoin, it would have been hard to touch coins that hadn’t yet been exposed to the dark web.
Therefore, whatever claims authorities make about exchanges taking part in the dark web, it’s unlikely that anyone could make any money in the early days without handling traffic from any part of Bitcoin.
Bitcoin’s fungibility s paramount to its success, as it would otherwise be trivial to taint every coin with “dirty” money, simply by sending a few satoshis.
Vasilyev and Wex exchange, essentially, had at no point a legitimate business operation. It became apparent that the exchange was exit scamming around this time last year.
Now, finally, authorities have reportedly apprehended one of the perpetrators of the scam exchange and charged him.
It might be said that the majority of all crypto exchanges are untrustworthy. They’re either reporting fake volume or they’re stealing money.
Even some that have been around a long time, like HitBTC, can’t escape constant fraud accusations.
Now that it’s virtually impossible to use an exchange without some form of KYC, you might as well go through the process with reputable exchanges.
Pick something like Kraken or Binance or Coinbase, something that won’t turn around and bite you a month later.
In any case, what happens next with Vasilyev is currently unknown. He’s not the only exchange operator in Italy to be taken into custody. Previously, an exchange called BitGrail, which was intimately tied to the cryptocurrency Nano, had its assets seized by Italian authorities.
Last modified: May 20, 2020 2:14 PM UTC