Data Shows Millions Leaving Crypto Wallets Tied to Long-Troubled Exchange

The world's largest cryptocurrency exchange Binance has frozen accounts that received more than 93,000 ether from two wallets indirectly linked to the troubled Russian exchange WEX. The accounts were frozen on October 25, Leah Li, a spokeswoman for Binance, told CoinDesk.

The action was taken in response to pleas from WEX users who have been watching the ethereum blockchain, the known location of a public wallet belonging to the WEX exchange, uneasily in recent months while they have been unable to withdraw their funds off the exchange.

These users traced the flow of funds through the ethereum blockchain and concluded that the two wallets that sent the ether to Binance - in 25 transactions from August through October - were controlled by entities related to WEX. The traders have expressed concern that they won't get their money back now that the funds have been moved to Binance.

They are worried because WEX, a successor to the defunct BTC-e exchange that inherited its infrastructure, has not allowed withdrawals for major cryptocurrencies like bitcoin and ether since July.

The total figure could be higher, since only ether has been spotted leaving Wex-linked wallets so far, and users have been unable to withdraw most other coins for months.

WEX founder Dmitrii Vasilev framed the new exchange as a re-launch of BTC-e and said he was working with the old platform's administrator and would restore its customers' balances.

"If you don't want to follow the path of BTC-e, which was closed down by the authorities following its use in the laundering of cryptocurrency stolen from Mt. Gox, you should suspend all the WEX's wallets and accounts."

A CoinDesk review of public ethereum data found that the trail from the two wallets that sent ETH to Binance ultimately leads back to an address that was controlled by BTC-e. Further, the analysis shows that the BTC-e-tied address is linked, by way of a divergent path of transactions, to the one wallet clearly belonging to WEX. The BTC-e address is identified as such on Etherscan, a popular ethereum block explorer.

Binance's address is similarly labeled, but none of the more than 10 others are in the web of transactions between it and BTC-e. The series of transactions began on July 29, 2017, when 485,705 ETH was transferred from the BTC-e address in one batch to another address that users believe to be WEX's first wallet.

CoinDesk has confirmed that this wallet, pictured in the image below, belonged to WEX, since six users provided screenshots of their WEX withdrawal transactions - all of which involved the address, 0xb3AAAae47070264f3595c5032eE94b620A583a39.