BTC-e’s Domain Seized by US Authorities

The website domain of BTC-e, one of bitcoin’s biggest exchange until recently, has been seized by US authorities which have put up the above notice.

That now confirms the exchange has been shut down following the arrest of Alexander Vinnik, an alleged operator of BTC-e accused of laundering $4 billion through the platform.

That includes 300,000 bitcoins that belong to MT Gox, according to claims by the US authorities, with Mark Karpeles, the former CEO of MT Gox, calling Vinnik a thief.

Vinnik, however, has apparently denied the charges after being arrested in Greece where he is awaiting extradition to the United States.

As such, the matter may go to trial, with further details to be provided regarding just how exactly he laundered the Gox coins and other criminal proceeds.

BTC-e itself has been fined by FinCEN $110 million, with a similar amount of bitcoins suspected of belonging to BTC-e recently on the move.

US authorities have made no statement on the funds. So it remains unclear who currently has possession of the bitcoins and other assets, such as some 500,000 eth and plenty of ltc.

It is probable they are on the hands of US authorities, but we will need to await official confirmation on the matter which should be expected soon if they do indeed have the funds.

In which case, there would probably be some sort of claims process for legitimate users of BTC-e, but that process would probably take seven years or more.

That’s probably because they would likely have to wait for the trial of Vinnik to finish if he does continue pleading non-guilty, then they’ll have to analyze the addresses, movements, and all the rest to figure out who exactly was a legitimate user. All of which will likely take considerable time.

But it may well be the case the assets are being held by non-arrested BTC-e operators. In which case their approach towards the funds would be very unclear.

If they decide to run with it then the authorities would hopefully be on their trail, but it would raise significant questions about their intervention and the handling of the matter in the absence of control over the funds.

As such, we’ll just have to wait for confirmation on whether US authorities do or do not control the assets before speculating any further.