Global Witness investigation uncovers new details in FBI case against Bitcoin exchange company
18th November 2019, London - UK law enforcement is being called on to act over new evidence Global Witness has uncovered, linking a UK company owned by a Russian national to a Bitcoin exchange company that the FBI has described as a hub for cyber-crime.
A new investigation by Global Witness has found Mayzus Financial Services – owned by Sergey Mayzus and registered in the UK – was closely linked to BTC-e, a crypto-currency exchange platform whose alleged operator is currently in prison facing money laundering charges.
BTC-e—one of the world’s largest Bitcoin exchanges—had appeared to be just an arm’s-length client of MFS. However Global Witness has found that MFS employees maintained personal accounts on BTC-e and even dealt with press enquiries for the exchange, in addition to handling around $100 million in transactions.
Responding to this investigation Sergey Mayzus denied being involved in the day to day running of Mayzus Financial Services, and said that the company carried out all relevant due diligence on BTC-e before working with them and followed standard industry practice.
Louis Goddard, Data Investigations Advisor at Global Witness said:
“While it’s welcome that BTC-e has been targeted by law enforcement across multiple jurisdictions, serious questions remain unanswered over who really benefitted from this discredited Bitcoin exchange platform. Sergey Mayzus and his UK company are apparently closely tied to this story, and their connections worthy of further examination.
“BTC-e was used by drug dealers, financial scammers and even a Russian state-sponsored hacking group. Anyone making money from this platform must be investigated for providing the means for these crimes to take place.”
So far the only individual to be arrested and charged in relation to BTC-e is its alleged operator Alexander Vinnik, a Russian national currently being held in Greece. Investigations into the wider network involved in the company have been hampered by the use of offshore shell companies that allow many individuals to hide their identities.
Investigations into BTC-e have shown multiple anonymous companies, most of which are based in the UK’s Overseas Territories or former colonies, linked to the company. Meanwhile Always Efficient LLP, a UK registered entity whose ownership was obscured in the Seychelles, was central to the running of BTC-e.
Louis Goddard said:
“There is no doubt that through a secretive offshore network this is a case that goes far beyond one individual. It is yet another example of how the use of anonymous companies is central to allegations of criminality and wrongdoing.
“Although more and more countries are beginning to crack down on secret company ownership this should not prevent investigations into current cases that involve their use.”
Global Witness’ investigation also shows, via a leaked database, that by October 2014 BTC-e had almost 570,000 users holding a total of $30 million worth of Bitcoin, making it one of the biggest Bitcoin exchange platforms in the world. The lack of due diligence carried out on these users, who needed to provide nothing more than a username, allowed BTC-e to be used by those laundering the proceeds of criminal activity.
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