Russia’s Supreme Court has canceled a fine of more than 18 billion rubles ($221.1 million) imposed on Alexei Ivanov-Vilyuchenko, co-founder of failed cryptocurrency exchanges BTC-e and Wex. A civil suit seeking compensation was dismissed.
The court’s judgment states: “The judgment of the Savelovsky District Court of Moscow, the appellate judgment of the Civil Division of the Moscow City Court, and the judgment of the Civil Division of the Second Cassation Court of General Jurisdiction are reversed. The proceedings in the lawsuit brought by World Exchange Services against Alexei Sergeevich Ivanov for damages caused by the crime are terminated.”
Loss of legal recourse against WEX customers
In 2018, Ivanov-Bilyuchenko blocked access to the exchange by owners, their agents and users, according to investigators. The suspect embezzled virtual currency worth more than 18 billion rubles ($221.1 million), depending on the amount.
Under Article 160, Part 4 of the Russian Criminal Code, Ivanov-Bilyuchenko was convicted of theft on a very large scale by the Meshchansky Court in Moscow. Following the ruling, Singapore-based company World Exchange Services Pte. Ltd., owner of virtual currency exchange WEX, filed a lawsuit, seeking monetary damages.
He agreed to cooperate with police before sentencing and complied with the sentence. As a result, he was sentenced to three and a half years in a general regime penal colony and a fine of 500,000 rubles ($6,142). The Moscow City Court upheld the First Court’s decision, which became law.
Now, a Russian Supreme Court ruling has canceled civil claims that remain one of the few remaining legal avenues for WEX customers to recover some of their lost assets.
Most of the exchange’s crypto assets have been moved, commingled, or seized by other parties long ago, and with no clear ownership structure or ongoing compensation fund, users are effectively left with no avenue to recover their deposits. The judgment emphasizes that the bankruptcy remains unresolved and customers should not expect a refund.
US charges against Vilyuchenko remain pending
Outside Russia, Alexei Ivanov-Vilyuchenko was formally indicted by the US Department of Justice (DOJ). According to reportHe was involved in the 2014 Mt.Gox hack, one of the largest cryptocurrency thefts in history.
According to the Justice Department, Vilyuchenko and another suspect, Alexander Varner, were charged with conspiring to launder approximately 647,000 Bitcoins stolen from the Mt.Gox exchange.
Despite the high-profile indictment, there has been little movement in the case since the indictment was unsealed. Mr. Vilyuchenko remains in Russia and there is no record of his extradition, trial or conviction in the United States. The Department of Justice documents remain in the archives as an unresolved indictment. This means the claim is still legally pending.
Moreover, earlier, the VChK-OGPU Telegram channel close to Russia’s security services reported that 6,500 Bitcoins worth approximately $694 million were lost in a cryptocurrency wallet associated with Alexei Ivanov-Bilyuchenko. These pending cases illustrate the fate that awaits Vilyuchenko: prison.
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