BTC-E Cryptocurrency Exchange
History of BTC-e
BTC-e was founded in July of 2011 as a Bitcoin and Litecoin exchange which initially catered primarily to the eastern European market, but soon increased the customer base. While the exchange dealt a handful of other cryptocurrencies, such as Namecoin and Ethereum, it was primarily known for trading Bitcoins in US Dollars, Euro and Russian Rubles.
The site was created and operated by Always Efficient LLP, which had two operators in Sandra Esparon and Evaline Joubert as well as two other people who controlled the company in Alexander Buyanov and Andrii Shvets. The four key players in BTC-e created a Bitcoin exchange site that saw massive growth over the years, handling upwards of 3% of the total Bitcoin trading volume in the world.
The site became popular due to great marketing from the owners, also due to its design which made it easy to see the value of the Bitcoins against real currencies as well as against other cryptocurrencies. It made easy to create an account, easy to deposit and withdraw and most importantly, easy to begin trading and move Bitcoins and other cryptocurrencies to wallets outside of BTC-e.
Like most other exchange sites, BTC-e made money by charging a fee every time a trade was made on the exchange platform. This model made BTC-e mint money through the years, as they had a very large portion of the overall trade volume of Bitcoins and other cryptocurrencies.
But like many other Bitcoin and cryptocurrency exchange sites, BTC-e experienced many Distributed Denial of Service (DDOS) attacks. The users experienced downtimes on many occasions where they could not access their coins or do trades, and as a result, volume drop was seen in 2013 and 2014. It also created some distrust towards the exchange, but not anything major as users saw that they always gained access to their coins after each attack.
To counter this problem, BTC-e integrated the reverse proxy service from Cloudflare, which caused attacks and downtimes to go down significantly and thus, create a safer and secure environment for their users.
With the integration of the service, trade numbers began to rise and BTC-e was back on the track. But as seen before in the cryptocurrency exchange industry, this was not the case and one morning in 2017, the users woke up to a closed down BTC-e.
On the 25th of July 2017, many thousand users wanted to gain access to BTC-e to see the value of their Bitcoins, trade and cash out their profits. This was no longer possible as all users trying to connect to BTC-e got a message from the US Justice Department, explaining that the domain had been seized as a part of joint law enforcement operation between multiple departments including the FBI, US Secret Service and Homeland Security.
This caused many users to panic, rightfully so. Threads were created all over the internet discussing what had happened and if they would ever see their money and coins again. Nobody really knew what was going on and if it was another Mt. Gox situation or if it was another Cryptsy situation. No matter what, it didn't look very good.
It didn't take long before the news came out that several BTC-e staff members had been arrested, server equipment has been seized from their data centre and one of the key members Alexander Vinnik has been arrested while on holiday in Greece. BTC-e quickly responded to this claiming that Vinnik was not an owner, operator or staff member of BTC-e, but this has not been confirmed.
Furthermore, the exchange went out and said that they would be creating a new site for users to trade within weeks or a few months, where the coins that were being held in BTC-e would be available for the users of the site.
What Went Wrong?
It is important to state from the beginning, that nobody has been found guilty of any crimes yet, thus, this article will relay information provided by the operators of BTC-e, WEX.nz as well as the US Justice Department. At the time of this article, the information provided are simply charges made against individuals of BTC-e and has yet to be convicted in a court of law.
The closing of BTC-e came as a hard blow to the Bitcoin and cryptocurrency industry. BTC-e was one of the more trusted sites for trading and had shown no sign of going “belly up”. They were also amongst one of the oldest sites still operating and it was believed in the industry that the reason for that was due to them understanding how to work the industry in the right manner. However, the allegations brought forward from the US Justice Department gave a different picture of BTC-e.
With the seizing of the BTC-e domain, the US Justice Department brought along a press release where they outlined the charges against BTC-e and the operators of the company behind the exchange. Amongst those charges where 21 counts of money laundering as well as other types of financial crimes, such as running an unlicensed money transmittal company and also facilitating an outlet for criminals to move around their stolen Bitcoins.
The US Justice Department alleged that the site was used by many criminals to exchange their stolen, hacked or fraudelent Bitcoins, and thus, create an untraceable pattern and help them launder their funds. It also claims that they helped launder stolen Bitcoins from the Mt. Gox hack which made the, at the time, worlds biggest Bitcoin exchange go broke.
It is also claimed that the key person of interest, Alexander Vinnik, didn't just run an unregulated Bitcoin exchange site. It is also alleged that he steal identities and facilitated drug trafficking for major crime syndicates, besides having done tax fraud as he did not pay the correct taxes on his earnings.
Overall, many charges were brought forward by the US Justice Department, who believes that Vinnik is the key person behind BTC-e, due to them tracking a lot of direct cash outs from BTC-e to his personal bank account, despite BTC-e claiming otherwise. You can read the full statement from the US Justice Department here.
Besides, all the charges made against Vinnik and BTC-e, a fine was also facilitated by the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN). The fine is the biggest so far in the Bitcoin and cryptocurrency industry, totalling at $110.000.000.
The Opening of WEX.NZ
As mentioned earlier in the article, the company behind BTC-e quickly announced that the charges against them were not true and that Alexander Vinnik was not a part of their operators or staff. It was also mentioned in their press release that they would open up a new site to operate from and that they would begin the facilitate refunds for customers so that they could continue to trade with them.
Unlike with Cryptsy and other closed down exchange sites, the company behind BTC-e actually kept true to their words and opened up their new exchange site, now known as WEX.nz. The site is a 1:1 copy of the now closed down BTC-e and users have been able to login to their accounts and see their balances and do with the coins/funds as they want. This includes continuing to trade, as well as cash out funds and coins should that be the action of choice.
I Am Still Missing Coins, What do I do?
If you are a former customer of BTC-e and you believe that you are missing coins or even funds, you should contact the support of WEX.nz, who will look into the issue and credit you the missing amount. Please be aware that you will need to login to your old account and reset your password in order to gain access to your information.
Selling cryptocurrency works exactly the same way as when you buy cryptocurrency. You will need to find the correct market to sell to so you get either Bitcoins, LiteCoins or real currencies for your sale depending on what you want to receive. Once that has been found you need to enter the amount of coins you want to sell and the price you want to sell them for. There will be the market standard price in the price per coin box, but again it is possible for you to change it to what you want for them, either to get a better price or to have a quick sale.
When you have entered all of these values and placed the selling order, BTC-E will match your order against the open buying orders and see if they can find a match. Otherwise the order will be in the market, where others can see your order and decide to buy your coins for the price you have specified. Once the order has been processed you will receive cash or coins and the other party will receive the coins he bought from you. Simple and fast process, eliminating any chances of getting scammed out of money and with a very low transaction cost.