The Russian Ministry of Interior has rejected a request filed by clients of Wex to do its part in the blocking of crypto funds removed from a wallet controlled by the now-defunct crypto exchange. More than 10,000 ETH were recently removed from the wallet and transferred to other platforms.
Wex Victims Try to Freeze $46 Million of Cryptocurrency Lost to Bankrupt Russian Exchange
The Investigation Department of the Ministry of Internal Affairs of Russia (MVD) has refused to act on a request from victims of crypto exchange Wex to take steps aimed at seizing digital assets worth $45.9 million withdrawn from one of its wallets in September. The details were shared on social media by Indefibank CEO Sergey Mendeleev, who cited an official document from the department.
The former Wex users have provided the MVD with a detailed scheme of how the funds were transferred from the wallet to other crypto platforms, Forklog reported. They also submitted data from a scan tool to prove that the coins had been stolen and informed authorities that they had contacted Binance where part of the amount, 97.8 ETH, was sent. The crypto exchange froze these assets for a period of seven working days.
Current procedures at Binance allow the company’s security department to temporarily freeze funds after receiving convincing evidence of a theft. Then the party that requested the measure must contact the relevant law enforcement authorities and send a police report back to the crypto trading platform. Binance would then cooperate with investigators to resolve the case.
The Wex clients referred to the Russian Interior Ministry calling for the seizure of the stolen funds. However, according to an official response from the department on Oct. 25, the circumstances exposed by the victims require further investigation before authorities can take action. The MVD believes that a decision to confiscate the assets during the preliminary investigation and based on the available information would be premature.
The Wex crypto exchange is the successor to the infamous BTC-e, once Russia’s largest crypto trading platform, which went offline four years ago. In September this year, reports came out that Wex’s former chief executive, Dmitry Vasiliev, has been arrested in Warsaw. They were then confirmed by the Polish authorities who also announced that they were examining an extradition request submitted by Kazakhstan where he is accused of fraud.
Wex was launched in the fall of 2017 and it reportedly reached a daily turnover of $80 million before it suddenly halted withdrawals in the summer of 2018 and eventually went bankrupt. According to estimates by a group of users quoted by Forklog, the total losses exceed $400 million and Vasiliev is suspected of misappropriating $200 million.
The crypto media reported that 100 ETH had been removed from a Wex wallet in mid-September. That’s the first movement of these funds in the past three years, the publication noted. The remaining balance in the wallet, 9,916 ETH worth $ 30 million at the time, was also transferred to a new address a few days later.
