BTC-e Downplays Concerns of Criminal Investigation, Now Revealed as Hoax

A post on the website of the Prosecutor's Office of the Russian region Volgograd claims BTC-e is "under investigation".

AccessTimeIconFeb 3, 2014 at 10:26 p.m. UTC
Updated Feb 21, 2023 at 3:36 p.m. UTC
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UPDATE (4th February, 08:43 GMT):

New information has come to light that shows the criminal investigation may have in fact been a hoax.


The eighth largest bitcoin exchange by volume, BTC-e is now "under investigation" by the Prosecutor's Office of the Volgograd region in Russia.

English translations of the press release issued on behalf of the office suggest that the agency is initiating a criminal case against the exchange and its online resources.

Speaking to CoinDesk, representatives from BTC-e denied any wrongdoing and reiterated that they are not worried about any potential actions by Russian authorities. However, BTC-e did move to increase fees on USD, RUR and EUR transactions following the announcement.

Law enforcement officials are specifically looking to block the BTC-e website in Russia, under a new law that allows it to shut down websites that are associated with terrorism or other types of potentially dangerous extremism.

Russian authorities suggest that BTC-e is being investigated for the laundering of criminal funds as well as fraud. Notably, the comments come one week after the Bank of Russia announced that issuing alternative currencies in the Russian Federation is prohibited.

BTC-e unconcerned

BTC-e representatives were confident that Russia's actions will not be detrimental to their operations. A spokesperson implied that BTC-e faces little risk, as it does not have any offices in Russia or work with any Russian banks. Its founders Aleksey and Alexander, while residents of Russia, are not citizens.

The often-perceived secrecy with which it conducts operations could even bring some comfort to the organization. As noted in our 11th December report on the exchange:

"BTC-e is anything but transparent: it uses third-party banking services to keep its name out of official records. At least one of the banks involved in the process is located in the Czech Republic; the BTC-e site references Bulgaria in its SEO descriptions; the founders, Russian programmers Aleksey and Alexander, honed their skills at the Skolkovo tech park; and the BTC-e managing company is based in Cyprus."


Trading volumes on BTC-e remained unaffected by the news as evidenced by the stable prices on the exchange at press time, coupled with open talk of the actions on the website's central forum.

btc-e, russia
btc-e, russia

When asked whether the actions would restrict the ability of the exchange to handle new Russian deposits, the organization said only that this would "depend on the laws that will take in Russia".

Furthermore, a nationwide ban, while potentially prohibiting new participants from accessing the exchange, would likely not be able to deter BTC-e's use by its existing base. BTC-e users could still rely on the anonymous TOR network or utilize VPNs to conduct transactions.

In addition, service interruptions are certainly not unknown to site users. Last December, BTC-e reported banking issues due to updates of their service architecture that would likely affect users until January.

Image credit: Moscow Kremlin / Shutterstock 


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