FBI Wanted Co-Founder of Crypto Exchange Wex Sentenced in Russia

FBI Wanted Co-Founder of Crypto Exchange Wex Sentenced in Russia – Aleksey Bilyuchenko, co-founder of Wex, the successor to the notorious Russian crypto exchange BTC-e, has received a relatively lenient prison sentence of three and a half years and a 500,000-ruble ($5,000) fine in Russia. He was the sole defendant in a case related to the collapse of Wex, which caused significant losses to its customers. 

This leniency followed Bilyuchenko’s appeal to Russian President Vladimir Putin for mercy, and the judge further reduced the sentence, despite accusations of embezzling billions of rubles in customer funds in Russia. BTC-e, a platform associated with cybercriminal activities involving the storage, transfer, and laundering of illicit funds amounting to billions of U.S. dollars, was shut down by Western law enforcement in July 2017.

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Wex, established as its successor, went offline in 2018, leading to customer losses estimated at up to 16 billion rubles (over $167 million today). According to court documents unveiled on June 7, 2023, Bilyuchenko had collaborated with alleged BTC-e operator Alexander Vinnik and others to operate the exchange from 2011 until the summer of 2017.

In the same year, Vinnik was arrested in Greece and subsequently extradited to the United States in August 2022 to face trial. In contrast, Bilyuchenko, who is still wanted by the FBI and facing charges in the U.S. for money laundering conspiracy and operating an unlicensed money services business, was apprehended in Russia in March 2022, becoming the sole defendant in the Wex case there.

During a hearing on September 6, Russian prosecutors presented Bilyuchenko’s own testimony, revealing that he had served as Wex’s system administrator despite controlling significant sums of money, some of which he distributed to security officials and others in exchange for protection. It also came to light that the exchange’s owners, reportedly linked to sanctioned Russian billionaire Konstantin Malofeev, suffered losses amounting to 3.17 billion rubles (approximately $33 million).

In the final hearing on September 20, it was disclosed that the defendant had appealed to Russia’s President Vladimir Putin and Defense Minister Sergei Shoigu, seeking release from custody, avoidance of punishment, and deployment to the “zone of the special military operation” in Ukraine. Observers also speculated that he might assist in recovering some of the victims’ funds.

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However, the state prosecution requested a four-and-a-half-year prison term, which Judge Varvara Oganova reduced to three and a half years. Bilyuchenko, who had changed his last name to Ivanov and pleaded guilty before the trial, had already spent a year and a half in pre-trial detention. Additionally, he was ordered to pay a fine of 500,000 rubles instead of the 1 million ruble fine initially sought by prosecutors.

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