Ex-CEO of Crypto Exchange WEX Arrested In Italy

Dmitri Vasilev, the former CEO the now defunct crypto exchange WEX, was arrested Friday in Italy, the BBC's Russian Service reported.

The publication cites Vasilev's acquaintance and two anonymous investors in WEX who told BBC about the arrest.

WEX was launched in 2017 as a successor of also defunct exchange BTC-e, whose alleged operator, Alexander Vinnik was arrested in 2017 in Greece and now facing extradition to the U.S., France or Russia.

The troubles started soon after Vasilev tried to sell WEX to Dmitri Khavchenko, a militia fighter in the war in Eastern Ukraine.

In the meantime, over the summer and fall of 2018, almost $19 million worth of ether moved from the exchange's cold wallets to the popular crypto exchange Binance.

Responding to the outcry on Twitter, Binance CEO CZ said that WEX's accounts on Binance had been frozen.

Users, mostly from Russia and neighboring countries, who were unable to get back their crypto and fiat deposited with WEX, started filing police reports in the fall of 2018.

In March of this year, the auditing firm PwC reported that two Iranian citizens, Faramarz Shahi Savandi and Mohammad Mehdi Shah Mansouri, who are said to have created the SamSam ransomware, had been using WEX to launder over $6 million collected in ransom payments.

According to a Wall Street Journal report, "BTC-E appeared in 60 to 70 percent of all criminal cryptocurrency cases through 2016." Both BTC-e and WEX were slow to introduce know-your-customer procedures and had anonymous support teams.

Image of Dmitrii Vasilev, ex-CEO of the crypto exchange WEX, via YouTube.