BTC-E Says It Will Return Customers' Bitcoins After Being Shut Down By DOJ

In what would be a surprising achievement, after the US government seized the site's domain, BTC-e announced that it has somehow retained access to customer wallets and deposits nearly two weeks after the site was taken down by a collaboration between US and European authorities. The announcement was published on a bitcoin forum account long associated with the shadowy exchange, so there’s no guarantee that it represents an official statement from the company, or whatever’s left of it.

Authorities arrested the BTC-e’s alleged founder, Russian-born Alexander  Vinnik, in Greece late last month after unveiling a 21-count indictment  against Vinnik and BTC-e, which included a $110 million fine for the mysterious digital-currency exchange, as we  reported.

Vinnik was accused of using the exchange to operate a $4 billion money  laundering scheme using cryptocurrency. According to the indictment,  Vinnik helped the hackers who stole tens of thousands of customer  bitcoins from Mt. Gox in the largest, and probably most infamous,  cybertheft in digital-currency history. The Fed’s described  BTC-e as the “exchange of choice to convert digital currencies like  bitcoin to fiat money for the criminal world, especially by those who  committed their crimes online.”

This isn’t the first statement purportedly released by BTC-e since  Vinnik’s arrest. A day after the site was seized, the same account  published a note assuring customers that they would get their money  back.

BTC-e Makes Latest Announcement

Following the arrest of Alexannder Vinnik , a 38-year-old Russian man that is  accused of money laundering, the BTC-e exchange domain has been taken  down by the FBI, with multiple reports connecting the two and describing  Vinnik as a “key person behind the platform” that used it to launder  coins used by criminals.

The Russian exchange, which has kept quiet over the last few days, posted an announcement   today on Bitcointalk, a popular Bitcoin  and cryptocurrency forum. In the post, BTC-e provides more information  about what is currently happening with the exchange from their point of  view. The (translated) post reads:

On July 25, 11:00 the FBI staff came to  the data centre where our server equipment was located and seized all  equipment, the servers contained databases and the wallets of our  service. On July 28, the domain was confiscated. At the moment, part  of the service facility is arrested by the FBI.

What About Users’ Funds?

The post also references a future  announcement which will update clients on the state of service and on  how they can retrieve their funds if the service is not restored. The  post reads:

In the current situation,  if the service is not started before the end of August, Then from  September 1 we will start the process of refund. In the next 1-2 weeks,  we will evaluate and publish information about how much money fell into  the hands of the FBI and what amount of funds is available for return.

With the Mt. Gox disaster  still in mind, lost funds are currently the main concern on everyone’s minds. Some users have even created a petition on Change.org urging the Department of Justice to return the coins to the  clients. The petition, which has roughly 2800 signatures, reads:

Hi, a few days ago a crypto currency  exchange has been shutdown by the us government and a lot of innocent  people lost a lot of money in the process.  We need our money back!

BTC-e and Alexander Vinnik

In the announcement, BTC-e also talks  briefly about Alexander Vinnik, stating that he is not and never was an  employee of BTC-e nor the head of the service.  Alexander Vinnik was arrested in Greece last week under suspicions of running a money laundering operation. According to several reports,  the Russian man is said to be an operator of the BTC-e exchange, using  the platform to laundry Bitcoins for “people involved in crimes ranging  from computer hacking to drug trafficking”. Although it is not clear if Vinnik does have a connection to BTC-e, the exchange has been known to be a prime choice  for cyber criminals looking to cash out their Bitcoins, a process made  easy due to the lack of KYC/AML policies. It is possible that BTC-e will  provide more details about Alexander Vinnik and his connection to the  exchange in its future update.

What are your thoughts? Is Alexander Vinnik connected to  BTC-e? Will users ever recover their funds? Let us know in the comment  section.  

 Content credit: 

 http://bitcoinist.com/btc-e-disavows-alexander-vinnik-promises-return-user-funds/ 

bitcoinist, zerohedge