Tech

New cryptocurrency scandal: WEX exchange programmer claims swindlers posed as Russian government agents

by Charlie Smith on December 30th, 2019 at 9:42 AM
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      There have been some wild news stories this month in the blockchain world.

      The latest concerns the 2018 collapse of the cryptocurrency exchange WEX. That debacle prevented customers from gaining access to US$450 million in investments.

      Today, BBC Russian reported that a computer programmer, Alexei Bilyuchenko, told police he was tricked into handing over all of the WEX's assets to fraudsters posing as Russian government FSB agents.

      According to BBC Russian, Bilyuchenko has gone into hiding.

      Meanwhile, a spokesperson for the investors, Alexander Terentiev, said he's "not convinced" that the computer programmer was telling the truth.

      That's not the only bizarre cryptocurrency tale this month.

      There has also been a call to exhume the body of former Vancouver resident and QuadrigaCX cryptocurrency exchange founder Gerald Cotten.

      This came not long after a lengthy Vanity Fair story explored various theories about what might have happened to him.

      The 30-year-old supposedly died in India in December 2018 with about $180 million of his clients' funds locked up behind passwords.

      Cotten's widow has claimed that he didn't share them with anyone, making it virtually impossible to recover the money.

      That's led to speculation in some circles that Cotten might not actually be dead and could have absconded with vast wealth.

      So, on December 13, Miller Thomson insolvency lawyer Asim Iqbal wrote a letter to the RCMP asking it to conduct a post-mortem autopsy on Cotten's body to confirm his identity and the cause of death.

      The collapse of WEX and QuadrigaCX—not to mention various Bitcoin scams—have seriously undermined public confidence in cryptocurrencies and led to calls for regulatory reform.

      The Q3 2019 Cryptocurrency Anti-Money Laundering Report, published by the blockchain forensics team at CipherTrace, reported that thefts and frauds reached US$4 billion in the first nine months of 2019.

      The vast majority of popular exchanges have "poor or porous" know-your-customer practices, according to CipherTrace, which can facilitate money laundering.

      In response to reports like this, YouTube deleted hundreds of videos focusing on bitcoin and cryptocurrencies around Christmas after they were flagged as "harmful or dangerous" content.

      That led to howls of outrage, so these videos were quickly reinstated on the popular social-media site.

      This morning, one bitcoin is trading for $9,547.50, which is down from this year's high topping $16,000.

      But it's still well over double this year's low point in early February.

      So what's in store for the world's most famous cryptocurrency in 2020?

      Long-term Bitcoin critic Peter Schiff is predicting it will fall to US$1,000.

      Former Goldman Sachs partner and Bitcoin bull Mike Novogratz, on the other hand, has predicted that one bitcoin will finish 2020 above US$12,000.

      That equates to $15,678,60 in Canadian currency as of today's exchange rate.

      * According to the Bitcoin Foundation, the word "Bitcoin" should be capitalized when referring to the concept, whereas the word is written in lower case when referring to a quantity of the currency.

       

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