The Polish police detained a Russian citizen linked to the now-collapsed WEX exchange for alleged fraud and money laundering. US authorities solicited his extradition for his crypto-related crimes and currently await the completion of the extradition process.
Related Reading: ‘Most Horrible’ Crypto Launch? On-Chain Investigator Accuses ‘Hawk Tuah’ Girl Of Memecoin Scam
WEX’s ‘Crypto King’ Detained In Poland
On Friday, local media outlets reported that Polish authorities had arrested a 37-year-old Russian citizen in Warsaw. Due to Polish laws, the media reports called the suspect “Dmitry V.” but seemingly referred to the former CEO of the WEX crypto exchange, Belarus-born Dmitry Vasiliev.
Vasiliev was arrested by the “Shadow Hunters,” an elite unit of the Central Bureau of Police Investigation (CBŚP), at an apartment in the Wola district, Krzysztof Wrześniowski, a CBŚP’s spokesperson, revealed.
Wrześniowski noted that the arrest was based on an order issued by the Warsaw District Prosecutor’s Office, which acted on an extradition request from the US Department of Justice. “Dmitry V. is suspected of numerous frauds, money transfers, and money laundering in connection with running one of the largest cryptocurrency exchanges in the world,” he added.
It’s worth noting that Vasiliev was arrested in Poland in August 2021. The fugitive was detained at Warsaw’s Chopin Airport on a request from Kazakhstan, seeking his extradition for crypto-related crimes. However, he was released after a few weeks in custody and returned to Russia.
Polish authorities expressed disconcert about how Vasiliev reentered the country and remained undetected for so long, suggesting that he probably lived quietly to evade the law.
Now, the wanted “crypto king” faces a new extradition request from the US to be prosecuted for his alleged crimes. If successfully extradited, Vasiliev could face up to 20 years in prison, Wrześniowski stated.
The man is in custody, awaiting the completion of the entire procedure in connection with his extradition to the US.
The $450 Million WEX Collapse
As several media outlets have reported, Vasiliev allegedly managed World Exchange Services (WEX) until its collapse in 2018. The exchange was born to “fill the gap” of the extinct BTC-e crypto exchange, which shut down due to an FBI investigation for international money laundering and hiding the stolen funds from Mt. Gox.
As reported by the BBC in 2019, despite Vasiliev being the figurehead, WEX was run “from the shadows” by Alexey Bilyuchenko. Bilyuchenko was Alexander Vinnik’s partner in the defunct BTC-e exchange.
After BTC-e’s collapse, he funded WEX with the help of millionaire Konstantin Malofeyev. The exchange crashed the next year when the $450 million in customer’s funds vanished. According to the BBC, Bilyuchenko stated he had lost control of the exchange in the spring of 2018 after being “tricked” by fake security service agents.
The suspect claimed he was “suggested” to send the funds to a wallet controlled by the Russian Federal Security Service (FSB) in a meeting with Malofeyev and the “agents.” He alleged that Malofeyev’s associates scammed him.
However, the Moscow millionaire, who has “strong ties” with the Kremlin, denies the allegations. Bilyuchenko initially evaded US detention for the BTC-e case but was reportedly arrested by Russian authorities for the WEX collapse in 2022. In 2023, he was charged by US authorities for his role in the BTC-e exchange and the Mt. Gox hack.
Related Reading: South Korean Crypto Exchanges Hit Record-Breaking $34 Billion Volume Following Market Shakeout
Bitcoin (BTC) is trading at $97,831 in the one-week chart. Source: BTCUSDT on TradingView
Featured Image from Unsplash.com, Chart from TradingView.com