An investigation by BBC’s Russian arm has revealed audio recordings which show that the cryptocurrency worth $450M that went missing from cryptocurrency exchange Wex in 2018 may have been transferred to accounts held by Russia’s spy service Federal Service Bureau (FSB).

The BBC stumbled upon the audio recordings while probing the BTC-e exchange, which was shut down by FBI over allegations it was involved in a money-laundering operation worth $4 billion. The recording centers around a Russian billionaire Konstantin Malofeev who is under US sanctions for financing the Russian army’s offensive in Ukraine and Wex founder Alexey Bilyuchenko who was also Co-founder of BTC-e.

The phone calls were recorded in April 2018. The audio transcripts reveal that Malofeev had urged Moscow to bring Wex under its control following which FSB officers summoned Bilyuchenko to their headquarters in Moscow and coerced him to handover details of all cold wallets on Wex. Using these details, over 30,000 BTC and 700,000 Litecoins, along with other cryptocurrencies, were transferred from the cold wallets. The total amount of cryptocurrencies transferred was $450 mn. FSB officers told Bilyuchenko that the money would go to the FSB Russia Fund.

The revelations raise several questions about transparency in the cryptocurrency sector. Bilyuchenko should not have been allowed to start Wex after BTC-e was shut over money-laundering charges. A more robust regulatory framework would have prevented such oversight. It also raises questions over the security of cryptocurrency accounts. For all its vaunted decentralization, a single person had access to thousands of digital wallets. He has to hand over these details either under coercion or under some other influence, and voila, we hit the jackpot.

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