Emily Walker
Authorities in Poland have arrested a Russian man associated with the now-defunct WEX cryptocurrency exchange on charges of fraud and money laundering. The US is seeking his extradition to face charges linked to his activities in the crypto space and is currently completing the necessary legal processes.
Arrest of WEX’s Alleged ‘Crypto King’ in Poland
Local news reports on Friday indicated that a 37-year-old Russian man has been detained in Warsaw. Due to legal restrictions, he has been identified in the media as “Dmitry V.”, likely referring to Dmitry Vasiliev, the ex-CEO of WEX.
Vasiliev was apprehended by a special unit known as the “Shadow Hunters” from the Central Bureau of Police Investigation at his residence in the Wola district, according to Krzysztof Wrześniowski, a spokesperson for the bureau.
Wrześniowski stated that the arrest was executed based on a warrant from the Warsaw District Prosecutor’s Office, which responded to a request from the US Department of Justice. “Dmitry V. is under suspicion for multiple fraudulent activities, including money laundering through one of the world’s largest cryptocurrency exchanges,” he mentioned.
Importantly, this is not Vasiliev’s first encounter with Polish authorities; he was previously detained in August 2021 at Warsaw’s Chopin Airport on Kazakhstan’s request for extradition over crypto-related offenses. He was released shortly after and returned to Russia.
Polish officials have expressed concern over how Vasiliev managed to re-enter and remain in the country unnoticed, hinting that he may have been living discreetly to avoid detection.
Currently, this accused “crypto king” faces a new extradition challenge from the US, where he could potentially be sentenced to up to 20 years in prison if extradited successfully, as noted by Wrześniowski.
He is now in custody, waiting for the complete extradition process to unfold.
The Downfall of WEX: A $450 Million Disaster
Reports reveal that Vasiliev was at the helm of World Exchange Services (WEX) until its abrupt downfall in 2018. WEX was created to “replace” the previous BTC-e exchange, which was closed due to a US investigation into international money laundering and the embezzlement of funds from Mt. Gox.
In a 2019 report, the BBC mentioned that although Vasiliev was the public face of WEX, the exchange was covertly managed by Alexey Bilyuchenko, an associate of Alexander Vinnik from the now-defunct BTC-e.
Following BTC-e’s closure, Bilyuchenko found funding for WEX with support from businessman Konstantin Malofeyev. The exchange collapsed the subsequent year when an astounding $450 million of customer funds disappeared. Bilyuchenko claimed that he lost control of WEX in spring 2018 after being deceived by individuals posing as security officials.
He alleged that during a meeting involving Malofeyev and these “agents,” he was directed to transfer funds to a wallet owned by the Russian Federal Security Service (FSB) and claimed to have been duped by Malofeyev’s network.
However, Malofeyev, who has governmental ties, rejects these claims. Although Bilyuchenko initially avoided US charges related to BTC-e, he was reportedly captured by Russian authorities in connection to the WEX situation in 2022. In 2023, he faced legal action from US authorities for his involvement in the BTC-e exchange and the Mt. Gox hack.
