Binance Freezes accounts associated with WEX exchange over money laundering claims

Dennis Wafula

November 1, 2018

CEO and Co-founder of giant crypto-company Changpeang Zhao announced that they had shut WEX’s accounts and frozen all funds in them. This is following money laundering allegations leveled against the controversial exchanger-WEX, formerly known as BTC-E.

Binance had been accused on Twitter for being used to clean the proceeds of stolen funds. Binance, the biggest crypto exchange by trading volume, was quick to quell these accusations by freezing the alleged accounts. The CEO added that they were also willing to work with law enforcement if called upon.

Controversial Exchange

The dubious exchange has been marred with controversy for some time. It began off as BTC-e before running bankrupt. It later restarted on the domain with reports indicating that WEX had paid off 20% of BTC-e’s debts. After some time, WEX started selling crypto on its platform at overvalued prices. In July 2018 for instance, WEX sold BTC at $10,000 when other exchanges were selling it at slightly over $8,000.

The smoking gun was perhaps Maple Exchange’s hacking on October 28 when 8 BTC was stolen. Although Altcoin users were refunded, BTC and LTC was not refunded to users. Attention was called to the authorities via Twitter where crypto-investor Joseph Young complained of the scam.

Complains via Twitter

Similarly, another Twitter user called on Binance to the attention of another scam by WEX exchange. John James pointed out that WEX exchanger was directing proceeds of stolen funds to Binance. The latter was accused of being used to move millions of dollars’ worth of stolen funds from WEX users. He alleged that funds from WEX cold wallets came to Binance, indicating Binance aids in money laundering. This comes after reports emerged that trading services were not properly functioning on the exchange earlier in the week.

The accounts, frozen on October 25, had received $93,000 in ETH but it was not until Monday October 29 that the official communication was made. The company regretted that it had to deal ‘with the mess of another exchange’ according to the CEO. He conceded that that was among the shortcomings of a centralized system of exchange.

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