What’s up with Btc-e? “UPDATE BTC-e refund site is up”

News Update (5th Sept 2017)

Hi based on the below link the BTC-e refund site is up and BTC-e is claiming to provide refund with the below two options:

OPTION #1 — — Take 55% now. This is all you get. You give up the right to the other 45%

OPTION #2 — — Leave your coins on there for now. 45% of the value of the coins you have are now denominated in “BTCe Coin” or whatever they’re gonna call it. No word on how anything else works.

With option 2 you also have to go through kyc/aml. option 1 isn’t simply about getting your money out now it’s also about avoiding kyc checks.

It’s coming from their official Twitter account the link. They disabled all password login without a reset since the fear the info may of been compromised. When you try and login it will send you a password reset to your email.

This information is based on limited information is available CoinDesk has an article

https://www.coindesk.com/btc-es-big-claim-bitcoin-withdrawals-begin-tomorrow/

They managed to recover 55% of their funds, the rest is confiscated by the FBI. So they set up a new site on the .nz domain so that their users can login and withdraw 55% of the balance they had there anonymously OR they can provide KYC documents and be credited a debt token (like bitfinex did) that Btc-e will try to repay with profits.

From the FAQ:

FAQ 31.08.17 21:55 from admin
Question — Answer
Cases of phishing emails have been more frequent recently. We would like to officially acknowledge our users that we never send any verification letters by email, please do not open files and do not follow links in those letters.
When will be the opening of trading?
If we do not encounter any bureaucratic issues, trading will be launched next week on a new platform.
How will my funds and profile be transferred to the new platform?
It will be done automatically; no additional actions from your side are required.
Will there be new passwords/2fa or all the security data will stay the same? Everything will be transferred to a new platform.
Was my coin deposit credited to the account after 25.07?
All deposits up to the 1st of August included will be credited later (1–2 of September), it will be done automatically, no additional actions from your side are required. We will not be able to credit the deposits made after the 1st of August, as they are being controlled by the US.
My account was verified, will this verification be relevant?
The company that fulfilled the verification has abrogated a treaty unilaterally, that is why you will have to go through the verification again on a new platform.
I do not receive any emails?
Check the spam box, most likely our emails were filtered there.
When will you start paying out available funds?
This process can start in the next few days; we will let you know 1 day prior the launch.
The pool is asking for the private key to transfer ETH funds. We can send you your private key if you create a ticket.
Will MT4 and PAMM be available in future?
Metatrader 4 White label and PAMM platforms were provided to us by Fxopen company. But after the charges were made by the US to our service they abrogated a treaty unilaterally.
Will there be access to trade without going through verification?
Yes there will be.
Will it be possible to verify several accounts that I had on the platform at once?
Yes it will be possible.
Are old coin deposit addresses still working?
Old addresses do not work now and all the coins sent to those addresses will not be deposited. New addresses will be generated for you on our new platform.
Will there be Bitcoin Betting on a new platform?
Yes, after we receive all necessary licenses.
You should submit a ticket if you encounter the following difficulties; Ticket system will be available from the next week.

New Update- Statement by BTC-e Staff (July 25 2017)

Post by BTC-E 
On July 25, 11:00 the FBI staff came to the data center where our server equipment was located and seized all equipment, the servers contained databases and purses of our service.

Almost for 6 days we could not get from our hosting provider the sane information, what happened to our servers because of this information we publish only now.

July 28, the domain was confiscated.

At the moment, part of the service facility is arrested by the FBI.

The next update will be information on what options are available to restore the service, as well as the procedure for obtaining funds, in the event that the service is not started. 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.

For all those who buried us, I will remind you that the service has always worked on trust and we are ready to answer for it. 
The funds will be returned to everyone!

Arrest of the Russian Vinnyk Alexandra:
Officially declare — Alexander was never the head or employee of our service.

Sincerely, btc-e

Personally I feel BTC-e and many such anonymous exchanges work on a thin line of what is legal and what is illegal. Though for many they are a sham but at the same time for the one who want anonymity for what ever reasons, its one of their only and best options.

**Update**

The below new byte confirms the reasons why BTC-E is down for over a day. And the reason being the arrest of its Alleged Admin 38-year-old Russian Alexander Vinnik. It is alleged by US Authorities that he was the master mind behind multi-billion dollar Money Laundering operations which was possibly through BTC-e. Also the Bitcoin hack trail from the Mt-Gox hack seems to be traced to him and it is alleged that 306,853 bitcoins stolen after the attack on Mt. Gox entered the BTC-e purses. Which is a big news as this will finally solve the mystery behind one of the worst hacks in Bitcoin history. It seems FBI have been tracking him for over last few months and once he got surfaced in Greece for his holiday, he was arrested by Greek authorities authorities.

Now his extradition proceedings are underway and he can be max upto 2 months under arrest under current Greek laws until his extradition proceedings are finalized. While this arrest may help bring closure to the billions worth of Bitcoins stolen in Mt-Gox hack but puts the investment of many genuine investors in BTC-e exchange under grave doubt and loss. And it is possible the current dumping of huge amount of bitcoins may be a fallout of this event.

Background

It all started with the tweet in Russian where the site tweeted “Due to the data center of btc-e may be temporarily unavailable #btce”. Its been 19 hours now that the site is still down. Going by the earlier instances its not new, they have been down for scheduled maintenance.
And going by the comments in the social media, the feedback of the exchange has been mixed.

On Social Media

Some earlier instances of them being in controversies is given below.

  • On 6th Apr 2017 they had faced a DDOS attack though their API was working and also Cloudflair DDOS protection was enabled but still they were able to recover.
  • On 5 Jun 2015 they had gone down and sent below tweet to notify it.

While there were many who commented on BTCE on not giving the ETA, there was also statement of a possible hack.

In the reddit discussions there were many who were supportive but many who also were angry about the way the exchange went down, and even worse they also implied to a possible hack.

“oooooooh there have been a lot of issues with BTC-E
They release cryptic news updates that are never investigated. They too jumped on the transaction malleability bandwagon in February 2014
They’ve manipulated their altcoin markets with bogus delisting and relisting announcements
They’ve taken bribes for listing altcoins
shit, what else?
BTC-E used to be THE go-to place to scam and be scammed. Bitcoin early 2013 and before, dark times. The shit today doesn’t light a candle.”
Also many complained about the cryptic messages that they posted about their un-scheduled maintenance. But during this period the website was back within just 5–6 hour window.

  • During 2013 and 2014, BTC-e had many outages related to Distributed Denial of Service attacks.[7] They later began using the reverse proxy service CloudFlare to help mitigate these attacks, reducing downtime for the exchange.
  • 3 years back in this this reddit post there were allegations of Money Laundering and also their easy way of anonymously buying cryptos meant people dumping their drug money in their exchange for cryptos. How ever there were many who supported the anonymous way of buying crypto currencies without getting through the hassels and issues of KYC.
  • And this reddit post complained about the lack of support from BTC-e and also felt harassed at not being able to withdraw their money from the exchange. Even people has to post in bitcoin talk and reddit and other platforms to get their attention.
  • And then finally this reddit post as to how they did not follow any AML/KYC and its an open secret that many coins that result from hacking and darknet market sales are laundered through there. And also the operators of the exchange are completely anonymous and eventually when the risks of running the exchange are too high, they will be incentivized to run with the coins.

And still the exchange had been running for quite long and had been one of the first generation exchanges where still one can go and trade coins.

Current Situation

Even till july 24th they were updating on features added to Btc-e as form the below tweet.

But the first message came in yesterday:

And one of the comments stated of a possible DDOS:

But still 13 hours back their only update was:

And there have been no updates since then.

Going by the number of comments, the anxiety levels have increased and there is a point of concern.
In the below tweets there was also allegations of the a huge spike in BTC trade implying BTC from BTC-e getting dumped.

Though the below links on Bitcoin and Ethereum show action but the suspicion is on BTC being dumped.

The most worrying news was the below tweet:

“And while BTC-E is “down”, some $169M bitcoin fortune is on it’s laundering way via hundreds of wallets” has been published on 247BTC 😖”

Exit Scam ????

The following reddit & Tweet sums it all

Some highlights
“Meanwhile in Cyberworld: one of the biggest cryptocurrencies exchanges “btc-e” with worth of $1B of bitcoins(10% of all) is down for 10 hrs”
“Already many rumors, about massive hack or fraud, with some btc accounts dumping hundreds of millions of USD in bitcoin today”
“Already many rumors, about massive hack or fraud, with some btc accounts dumping hundreds of millions of USD in bitcoin today”

Conclusion

Checking the below Blockchain.info links

One can see that almost 35,300+ BTC & 66000+ BTC getting dumped which is huge can mean very bad signs for BTC-e investors as a significant share of this BTC can be from BTC-e exchange (actively traded and in cold wallet) where BTC worth over 22,874 BTC (based on coinmarketcap info) had been present and now all of it at risk of getting lost. With such an old but risky exchange going down, it will become more difficult for people to trade and be part of the bitcoin economy anonymously. And this shows the cost that comes with anonymity provided by exchanges like Btc-e.

p.s: Even checking their wikipedia page the ominous statement of closure (or probable closure) becomes clear:

“BTC-e was closed on July 25, 2017.”

Reference:
https://en.wikipedia.org/wiki/BTC-e
https://twitter.com/Liveuamap/status/889969651987472384
https://twitter.com/btcecom
https://www.reddit.com/r/Bitcoin/comments/6pkjny/and_while_btce_is_down_some_169m_bitcoin_fortune/