Binance, the world’s largest cryptocurrency exchange in terms of trading volume, has frozen accounts that received over 93,000 ETH from two wallets linked to the WEX exchange.
Writes about this CoinDesk.
Binance spokeswoman Leah Li said the account freeze was carried out on October 25. The measures were taken in response to requests from WEX users who cannot withdraw their money from the exchange and monitor its cryptocurrency wallets.
These users were able to track the movement of funds on the Ethereum blockchain and determine that 25 transactions received by Binance from two wallets between August and October were sent from wallets associated with WEX. Traders were thrilled that funds went past their accounts on a third-party exchange.
Their concern did not arise out of nowhere, since WEX, which took over the user base from the defunct BTC-e, has not allowed withdrawals of cryptocurrencies such as Bitcoin and Ethereum since July this year. Earlier this month, Russian users reported to the police about problems with the exchange..
As CoinDesk notes, hundreds of users cannot withdraw their assets, judging by the size of Telegram groups devoted to discussing the current situation: one has more than 1,000 people, the other – 400.
The volume of the cryptocurrency transferred to Binance indicates that at least $ 18 million is at risk at the current ETH rate. The total amount may be higher as users cannot receive payments in most other cryptocurrencies.
For nearly a year, WEX has been functioning well and has begun to regain user confidence, some told CoinDesk. However, the situation quickly changed..
“Help us get our money back!” – Trader Maxim M. wrote to Binance in an email on October 20. “If you don’t want to repeat the history of BTC-e, which was closed by the authorities after it was used to launder cryptocurrency stolen from Mt. Gox, you must restrict all WEX wallets and accounts “.
Leah Li said her company “was not aware of the WEX situation,” but “always scrutinizes user complaints and suspends account service if it detects suspicious activity.”.
“We urge users who may have been affected by this situation to file a complaint with local law enforcement and ask them to provide us with case numbers or legal notice. So far we have not received such notifications, “she added.
Analysis of the Ethereum blockchain data showed that the trail from the two wallets from which ETH was sent to Binance goes to the address belonging to BTC-e. The BTC-e address is marked as belonging to the exchange in the Etherscan blockchain explorer. The Binance address has a similar mark, but more than 10 addresses in the chain of transactions between them are unnamed.
The series of transactions begins on July 29, 2017, when 485.705 ETH were transferred from a BTC-e address to another address, which users believe is the first WEX wallet.
Subsequently, this address transferred 480,000 ETH in 32 transactions in round amounts from September 2017 to January 2018 to another address.
CoinDesk was able to confirm that this address (0xb3AAAae47070264f3595c5032eE94b620A583a39), shown in the image below, belongs to WEX – six users provided screenshots of receiving funds from WEX, where it is indicated.
However, WEX broadcast was sent to other addresses as well. Another 184,772 ETH was transferred to the address 0x95cDdecd01856aA896426bd1ee021D87F3A5c199, and from there – to several more addresses.
Ultimately, two addresses, each linked to the BTC-e wallet through different chains of six addresses, sent large sums to the Binance wallet..
The first one sent Binance 78,581 ETH in two dozen transactions from August to October. The second – 14 794 ETH for three transactions on October 15, 18 and 22.
Trader Maxim said that the initial response from Binance did not inspire him: “They wrote that they can not do anything, but they will closely monitor these wallets.”.
CoinDesk reviewed the text that Binance sent to Maxim: “Thank you very much for the information, we want to cooperate with you. But at the present time it is difficult for us to check all WEX accounts and take action. In any case, we will continue to monitor this issue. If you have new information, please contact “.
Although Li said the accounts had been frozen back on October 25, this information was apparently not shared with WEX users until Binance CEO Changpeng Zhao announced it on Twitter..
On Monday night, Twitter user John James tweeted, “WEX cold wallets send money through Binance. This means that Binance is potentially helping to launder millions of dollars stolen from WEX users. We also have proof @cz_binance “.
Zhao quickly responded to the message: “The identified accounts are frozen. Please report to law enforcement and get a case number. We will be working with LE. This is part of centralization that we also hate, dealing with the problems of other exchanges (we don’t even know the details). But we will do our best. “.
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