Alexei Bilyuchenko, the former technology administrator of BTC-e exchange and co-founder of WEX, received a sentence of 3 years and 6 months in prison by the Meshchansky District Court of Moscow. Additionally, he was fined 3.1 billion rubles (around $33 million) for misappropriating the exchange’s funds. The prosecution had initially sought a sentence of 4.5 years and a fine of 1 million rubles (around $10,500).
This verdict comes on the heels of charges unsealed by the U.S. Department of Justice (DOJ) in June 2023. Bilyuchenko, along with Aleksandr Verner, faces accusations related to a 2011 hacking incident involving Mt.Gox, a prominent Bitcoin exchange at the time. Moreover, Bilyuchenko faces an additional charge in the U.S. for conspiring with Alexander Vinnik, who was extradited to the U.S. in August 2022.
BTC-e, once responsible for handling around 3% of all Bitcoin exchange volume, was shut down by Western law enforcement in July 2017. WEX, founded afterward, went offline in 2018, causing customers to lose up to 16 billion rubles (over $167 million today). According to reports, WEX was handed over to Konstantin Malofeyev, a Russian citizen charged with violating U.S. sanctions related to Russia’s actions in Ukraine.
Bilyuchenko’s own testimony revealed that he controlled large amounts of money, some of which he distributed to security officials and other persons promising protection. The exchange owners, reportedly affiliated with sanctioned Russian billionaire Konstantin Malofeev, lost around $33 million.
A plea for leniency
Bilyuchenko appealed to Russia’s President Vladimir Putin and Defense Minister Sergei Shoigu for leniency. He requested to be released from custody, spared punishment, and sent to the “zone of the special military operation” in Ukraine. However, the state prosecution requested a prison sentence of four and a half years, which Judge Varvara Oganova reduced to three and a half years.
Observers believe that Bilyuchenko could help return some of the victims’ funds. His sentence, already reduced due to time served in pre-trial detention, also includes a fine of 500,000 rubles, less than the 1 million rubles sought by prosecutors.