Alexei Bilyuchenko, the former technology administrator of BTC-e exchange and co-founder of WEX, has been sentenced by the Meshchansky District Court of Moscow. He will serve 3 years and 6 months in prison for misappropriating the exchange’s funds. Additionally, Bilyuchenko has been slapped with a fine of 3.1 billion rubles, equivalent to around $33 million, for causing financial damage to the exchange’s customers.
The prosecution initially sought a harsher sentence for Bilyuchenko, aiming for 4.5 years in prison and a fine of 1 million rubles. However, the judge settled for a lesser sentence and fine, sparking conversations about the leniency of the Russian legal system in this high-profile case.
U.S. charges against Alexei Bilyuchenko
Significantly, this sentencing comes on the heels of charges unsealed by the U.S. Department of Justice (DOJ) in June 2023. The DOJ accused Bilyuchenko and another Russian national, Aleksandr Verner, of involvement in the 2011 hacking incident related to Mt.Gox, a prominent Bitcoin exchange at the time. Bilyuchenko faces additional charges in the U.S. for conspiring with Alexander Vinnik, who was extradited to the U.S. in August 2022.
Moreover, the WEX exchange was reportedly handed over to Konstantin Malofeyev, a Russian citizen charged with violating U.S. sanctions. These charges relate to Russia’s actions in Ukraine in 2014, adding another layer of complexity to this already intricate legal web.
The rise and fall of WEX and BTC-e
BTC-e, once responsible for handling around 3% of all Bitcoin exchange volume, was shut down by Western law enforcement in July 2017. WEX, its successor, went offline in 2018, causing customers to lose an estimated 16 billion rubles. Court documents reveal that Bilyuchenko collaborated with Alexander Vinnik and others to operate BTC-e from 2011 until its shutdown in 2017.
In a surprising twist, Bilyuchenko appealed to Russian President Vladimir Putin and Defense Minister Sergei Shoigu for leniency and even requested to be sent to Ukraine. However, the state prosecution insisted on a prison sentence, albeit a reduced one.
As the legal proceedings unfold, it’s clear that this case is far from closed. Bilyuchenko, who changed his last name to Ivanov and pleaded guilty ahead of the trial, has already served a year and a half in pre-trial detention. His fine was also reduced from the prosecution’s initial request, raising questions about the factors influencing these legal decisions.
