Intrigue abounds around the allegedly Singapore-based WEX exchange, whose ownership and activities have both been called into question in recent months.
Particularly of interest was the exchange listing a much higher market price for BTC and weirdly overcharging for USDT. CCN previously gave our readers an overly interesting report on the exchange in which writer Conor Maloney explained:
WEX is a rebranded version of the BTC-e exchange which was shut down in connection to a multi-billion dollar money laundering operation with a Russian national named Alexander Vinnik reportedly charged in connection with the criminal operation.
Singapore business records indicate that the exchange is officially owned by one Dmitry Vasiliev, but he recently claimed to have lost control of the exchange and was unable to clarify exactly who was in charge.
RBK reports that a former Soviet militiaman called Dmitry Khavchenko was plannning on buying the exchange – Khavchenko is a Ukranian militia member with the callsign ‘Sailor’ and fought in Crimea to support the Russian annexation in 2014, seen in this video armed with a machine gun handing over to authorities the flight recorders from the Malaysian Flight 17 jet that was shot down over Ukraine in 2014 killing 283 passengers and 15 crew.
Binance Freezes WEX Accounts Caught Moving Customer Funds
According to reporting in the cryptomedia and the CEO of Binance himself, WEX has been caught moving millions of dollars in cryptos from its exchange through the largest exchange by volume, and Binance has in turn frozen the accounts and requested the public to contact law enforcement agencies.
the identified accounts are frozen, please report to law enforcement and have a case number. We will work with LE. This is part of centralization we hate too, dealing with other exchange's mess (we don't even know the details). But we will do what we can. https://t.co/tgyYI5ptqx
— CZ Binance (@cz_binance) October 30, 2018
WEX has previously frozen withdrawals and it seems likely that the problems on the exchange continue. Previous to its negative coverage regarding the withdrawal problems and its strange prices, WEX was an unknown quantity. Frequently people run into trouble when dealing with small, unknown exchanges, leading experts to advise that people stick with large-scale, regulated, known exchanges in all cases.
The high price of BTC on the exchange continues today and the exchange has not tweeted since August. Several clients of WEX have complained loudly on Twitter and elsewhere regarding the lack of withdrawals.
hi @cz_binance if @WEXnz is included this situation pls do not unfreeze the account until they let the withdraws… @WEXnz is one of the the biggest fraud of crypto
— gambinocrypto (@gambinocrypto) October 30, 2018
An unofficial Reddit page is filled with complaints, and one user has decided to take legal action in the form of a class action suit. Users also have perhaps unrealistic hopes that the Binance account freezing will result in Binance honoring the funds of WEX users – something that would be highly unusual. What Binance can do, however, is comply with law enforcement and ultimately return funds to users in that manner.
The news of Binance freezing the funds of WEX officials comes on the heels of a meltdown at MapleChange which resulted in tens of thousands of dollars in cryptocurrencies being lost. The episodes reinforce expert advice that the use of small and unregulated exchanges, even if it appears one will make a great deal in arbitrage, is probably best avoided.