The WEX cryptocurrency exchange has suspended withdrawals for Bitcoin, Litecoin, Bitcoin Cash, Ethereum, and Dash for the whole week, making its users suspect that the exchange has become bankrupt. However, the exchange is still permitting deposits, so those that have not been seen the warning regarding the withdrawal suspension are in for a rough surprise.
The situation isn’t made any better seeing as the warning isn’t visibly displayed on their website. Instead, the Twitter post that announced this issue has been obscured by other posts that were made on their news feed. This has prompted many to believe that WEX is leading an exit scam.
After the BTC-e exchange was seized by the US government, WEX tokens were then issued to repay its former customers. It should be noted that WEX has an identical design to the former BTC-e website.
BTC-e was stormed by authorities and closed for being suspected of money laundering, with its alleged owner Alexander Vinnik hunted by many countries for USD laundering. WEX has its headquarters in Singapore but it is actually owned by Russians.
“Due to wallets maintenance, BTC, LTC, ETH, BCH, DSH withdrawals won’t be available until 22 July. Sorry for inconvenience caused,” read the tweet.
Dmitry Vassiliev, the exchange’s official owner and operator, claims he is no longer in control of the company and has no knowledge as to who currently operates the exchange, which makes the current situation seem even gloomier for its users.
Vassiliev states that the vice president for the Russian Association of Cryptocurrencies, Dmitry Sutormin, had been selling an unlimited number of codes which can be converted into cryptocurrency on the platform.
This could be a reason to why Bitcoin’s price is much higher than what it is on other exchange platforms. As the WEX codes can be used to buy Bitcoins, the large volume of buying pressure generated by those redeeming WEX codes put together with limited sums of Bitcoin which exist on WEX would drive the price higher than it should.
At the time of writing, Bitcoin was priced at 8645.049 USD on WEX and 7,421.8 USD on Bitfinex. Because of this, some might see this as an arbitrage opportunity and make deposits on WEX, and only later would they discover they are unable to withdraw their funds.
There are many speculations that believe Sutormin is selling the codes at a price much lower than its true value, and that they’re not backed up by any real money, exhausting the exchange’s funds.