Troublesome Crypto Exchange WEX Sees Investors File Legal Complaints Requesting Refunds
Crypto Exchange WEX’s users have begun filing police reports after more than three months of being unable to withdraw cryptocurrencies or fiat. A WEX trader named Ruslan, who has been encouraging other users to seek an official investigation, told that as many as 35 such reports have been filed thus far online through the website of the Russian Interior Ministry.
Just the instance of a fringe cryptocurrency exchange’s users seeking help from the government is itself notable. WEX was built on the ashes of BTC-e, the mysterious, long-running exchange that ultimately collapsed after U.S. officials seized its domain and then slapped BTC-e and its suspected operator with a massive $110 million fine.
The opening interest around what was effectively a resurrection of BTC-e gave way to growing complaints around withdrawals, which manifested in sky-high prices well beyond those reported on more well-known exchanges. Those problems remain to this day, with the price of USDT – a questionable stablecoin that lost its equivalence with the U.S. dollar last week, trading for a astonishing $6.99 on WEX.
WEX users say they've been able to withdraw certain coins from WEX since the troubles began – but at a very abrupt price. Particularly, tether (USDT), zcash, namecoin and peercoin have been available for withdrawal. But their prices on WEX are extremely high compared to the rest of the market, so buying them just to get money off the platform is an expensive proposition.
Other cryptos also maintain extraordinarily high price tags on WEX, with bitcoin trading at $8,602 (compared to about $6,450) and ether at $319 (versus roughly $204).
Earlier this year, fiat withdrawals were opened but with commissions ranging as high as 45%. Even then, some users in WEX online chats said they were considering taking their money out, since the longer they waited, the less they trusted the exchange's management. But apparently, now, even this option is no longer available.
To add to the troubles, owner and CEO, Dmitrii Vasilev, was going to sell the exchange to Dmitry Khavchenko, a militia fighter in Eastern Ukraine. Following the news, withdrawals were frozen. Vasilev later told that he hadn't been in control of the exchange and that the administrators weren't communicating with him. The identities of the exchange's administrators, as well as those who actually custody user funds, has never been honestly revealed.