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With author’s permission Bits.media publishes a chapter that for the first time features the name of Dmitry Sokolov, another hero of the story of collapsed exchange, about whom almost nothing was known before the book “Crypta. How cryptographers, programmers and crooks shackled Russia with blockchain.
Block 13
Index: Exchange
Timestamp: February 2022
Hash: “Ghost” materializes
Previoushash: a mined Russia
On February 25, 2022, on the second day of the war, security forces from the Interior Ministry came to a hotel at a private airfield near Moscow.
They were interested in a man with the most standard name and surname: Alexei Sergeevich Ivanov. The man was carrying two suitcases filled, however, not with standard underwear and socks, but about 190 million rubles’ worth of cash.. The documents shown by Ivanov were issued quite recently: just a month before the visit of the police, he officially changed his last name and patronymic, having lived 42 years before that as Alexei Viktorovich Bilyuchenko.. This man is known to Russian and world crypto community as the founder and administrator of BTC-e/Wex crypto exchange.
On the same day, February 25, the Investigative Department of the Russian Ministry of Internal Affairs opened another case of the crash of the Wex exchange. Only if in the old one, opened back in 2019 under the article “Fraud” (Article 159 of the Criminal Code), the “admin” was a witness, in the new one – already a suspect in embezzlement (Article 160). Bilyuchenko-Ivanov was arrested, his home was searched, and among other things, hardware wallets with cryptocurrency were seized.. In addition to the press release, the Interior Ministry published a video with the traditional for this genre video sequence – puffy wads of money and a closet with expensive suits.
“At the same time, 29 searches were conducted in the homes of the figure and his alleged accomplices in Moscow, St. Petersburg, Novosibirsk and Yalta,” the video features the iron voice of police spokeswoman Irina Volk.
A month after the arrest of Bilyuchenko-Ivanov, Konstantin Malofeev’s Tsargrad publication published a large article dedicated to the “admin” case: it revealed for the first time that the man had changed his last name (even a scan of his passport is posted) and what he is accused of (a copy of the resolution on bringing him in as an accused person is posted). In fact, it was a long-awaited victory for one of the main ultra-patriots in the Russian elite over a Novosibirsk “itishnik. Malofeev said in this article that my investigation into the Wex case and the wave of false identities that followed were a provocation by the Ukrainian and Western intelligence services “to besmirch” his “reputation and the reputation of all Russian law enforcement agencies.
Why did the “admin” lose in the confrontation with Malofeev’s people after all? In September 2021, one of the wallets of the exchange went into motion and one hundred ether coins were withdrawn from it ($340000 at the exchange rate at the time). The money went to a wallet on the Binance exchange, which was then actively cooperating with the Russian authorities, and its vice president for global intelligence and investigations in the same September became a longtime acquaintance of Bilyuchenko – special agent of the US Internal Revenue Service Tigran Gambaryan. And if there was an “admin” behind this transaction, then those people from Malofeev’s team that he confronted in 2018 could get indisputable proof: he still controls the assets of the exchange.
The court materials show that, according to the investigation, Biliuchenko stole the property of the Wex cryptocurrency exchange’s legal entity, the Singapore-based company World Exchange Services. Initially, the estimate was given rather sweeping: not less than 16 billion rubles (the amount is known from the investigation documents, posted by “Tsargrad”). With this approach, all the assets of the “admin” that Russian justice can reach would go to the current owner of the company, Dmitry Khavchenko, or “Sailor”. The first case was the arrest of more than a hundred properties in Moscow, St. Petersburg and Novosibirsk (their value in the Interior Ministry estimated at 2 billion rubles). Neither the investigation nor Bilyuchenko-Ivanov’s defenders obviously did not want to make this list public, but, as usual, the clerks of the court got it wrong. When publishing the decision of the Moscow City Court, which upheld the decision of the lower court to seize the property, someone from the judge’s assistant erased all the addresses from the document, but left the cadastral numbers. This was enough for me not only to find out where the seized objects are located, but also to find out who owns them: I simply ordered an extract from the Federal Registration Service.
There are more than a hundred apartments, houses, land plots and non-residential premises on the list. Their owner, of course, was not Biliuchenko himself: the assets are either in the names of relatives like his mother, his brother or his brother’s daughter, or even in the names of seemingly strangers.. For example, the Novosibirsk entrepreneur Anton Kibardin, one of the founders of the local company Promotion.ru, which operates throughout Russia and specializes in organizing temporary retail outlets (the so-called “pop-up trade”) for cellular operators and banks.. One of his acquaintances assured me that Kibardin had gone on vacation with Bilyuchenko and had nothing to do with the exchange.. But he got in a lot of trouble – Kibardin was searched and, in addition to his apartment, his bank accounts were seized.. Moreover, the same amount of 16 billion rubles, which the “admin” allegedly stole from his own cryptocurrency exchange, was listed as a debt in the bank application.
“Then spent six months running around, proving, carrying certificates that he earned his own money for his apartments and cars, he never had money of such an order,” his acquaintance said.
Along with Kibardin, Dmitry Sokolov, a 38-year-old resident of St. Petersburg, also challenged the decision to seize his property.. His representative also testified in court that he had nothing to do with Bilyuchenko-Ivanov’s activities and that he bought numerous luxury apartments in the Northern Capital with his honestly earned money, from which he paid income tax.. The investigation, referring to certain operative-investigative measures, stated that Sokolov “participated in the legalization of money appropriated by Ivanov” and that all seized property in reality belongs to the same “admin.
And Sokolov’s property from the court list is impressive: it feels like he is literally collecting iconic properties. For example, in 2020, he bought a three-story apartment of over 400 square meters from the musician Sergey Shnurov. m on the corner of Tchaikovsky Street and Fontanka Embankment – opposite the Summer Garden. On the top floor there is an exit to the terrace overlooking the Peter and Paul Fortress: in the video of the Interior Ministry on the arrest of Bilyuchenko and the searches of “his alleged accomplices,” you can see operatives walking around it.
That same day, the operatives also paid a visit to another of Sokolov’s apartments – on the good news of a five-minute walk to a house on the corner of Neva Embankment and Gagarinskaya Street.. And this is another landmark: the 18th-century mansion that first belonged to Count Aleksandr Kushelev-Besborodko, and then to the merchant Aleksandr Eliseyev of the famous merchant dynasty that built, in particular, pompous stores in the center of Moscow and St. Petersburg. In the noughties the house was bought by an investment company connected with lawyer Ilya Eliseev, a classmate of then-President Dmitry Medvedev.. After the reconstruction, some of the apartments in the mansion with seven-meter-high ceilings, caryatids, and a car elevator were purchased by the Dar foundation, which, according to oppositionist Alexei Navalny, held assets in Medvedev’s own interests. Other apartments can be bought: for example, Sokolov bought a house here (170 sq.. m) in the same year 2020.
From the Interior Ministry video, it is unclear whether the operatives, wearing sweatpants and down jackets, dared to enter the main object of Dmitri Sokolov’s real estate collection – an apartment on Kamenny Island. Stone Island is a quiet elite place in the central part of the city, most of which is a park with a splash of Soviet government residences, pre-revolutionary villas and residential complexes of new Russia. One of them, at 19 Birch Alley, was built in the early 1990s, and can be called the “main house of the country.. After all, most of Vladimir Putin’s friends – from the banker Yuri Kovalchuk to the businessman Roman Rotenberg, from his judo sparring partner Vasily Shestakov to his neighbor at the Ozero dacha cooperative, Nikolai Shamalov – received multilevel apartments here.. In 2020, while working for Project, I uncovered the secret of another resident of this house, Svetlana Krivonogikh: she was so close to Putin that she may have given birth to his illegitimate daughter, Louise.
A total of twenty luxury apartments in the house. Sokolov moved in with the celestials of Putin’s Russia in early 2021, buying a three-story apartment of nearly half a thousand square meters.. When the “main house of the country” was first built, these apartments belonged to the family of Gennady Petrov, whom the Spanish justice system has called one of the leaders of the “Tambov-Malyshev criminal group” – the main symbol of “gangster St. Petersburg” of the 1990s. The neighborhood between Petrov and the members of the Ozero cooperative should come as no surprise: back in the ’90s he was co-owner of the small Petersburg bank Rossiya, whose shareholders also moved into a house on Kamenny Ostrov.. Already in the noughties the bank increased its assets, and the U.S. authorities, when imposing sanctions on it in 2014, called it a bank of the “inner circle of the Russian president.
In 2017, Gennady Petrov’s family sold an apartment to St. Petersburg entrepreneur Alexander Kinal. “Not an easy man.. I still haven’t figured out which world he’s closer to.. Rather to the security forces. I remember he had an office right in the courthouse on Fontanka Street,” said a businessman I know who used to do business with Kinal.
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His hesitation in assessing Kinal is understandable: on the one hand, not only did he buy an apartment from Genya Petrov himself, but he’s also been implicated in structures connected with Denis Volchek, ex-Duma deputy from the Liberal Democratic Party.. In the solid seat of the deputy Volchek sat in the zero years, and in the nineties he was a driver and partner Kostya-Mogila (Yakovlev) – another legend of “gangster St. Petersburg” (shot in Moscow in early 2003). Volchek himself had already been sentenced to three years in prison for fraud in 2021.
On the other hand, back in the early 1990s, Mr. Kinal created the IT company “Evrika,” which took over one of the buildings of the Soviet defense enterprise “Leninets” and began to work closely with the security services, including the FSB, Interior Ministry, FSO and Ministry of Defense (supplying computers, printers, inspection equipment, etc.). One of his partners, Evgeny Penkovsky, served in the Ministry of Internal Affairs during the Soviet era, and the other, Alexei Nikolaev, is a classical IT guy who worked in the eighties at the Research Institute of Physics at LSU (the future St. Petersburg State University). Kinal, who had at least an economics background, served as CFO. In the noughties, Eureka actually had an office in the St. Petersburg city court building. And it was at Eureka, if we believe the investigation by The Insider (recognized in Russia as a foreign agent), that the hacker who was involved in hacking into the emails of Emmanuel Macron’s election headquarters had once allegedly worked. Eureka itself later denied this information.
When Dozhd (recognized in Russia as a foreign agent) in 2018 asked Kinal about this hacker, he replied that he did not know him, and was only willing to comment about beekeeping because he was into beekeeping and apiary. Quite a peaceful hobby for a man who, in addition to his IT business in cooperation with the security services, was a member of the management bodies of several radioelectronic defense enterprises and was an assistant to the general director of the Almaz-Antey Concern, where air defense equipment is produced.
Of course, it is wrong to tie people together just because they buy apartments from each other (Kinal – from Gena Petrov, and Sokolov – from Kinal). Even in the “main house of the country,” where some of the tenants periodically put their luxury apartments for sale. Moreover, in 2022 the same Svetlana Krivonogih tried to rent out her three-story apartment for 700,000 rubles a month, but after I wrote about it on the BBC and published photos of pompous and simultaneously tasteless interiors, the ad was withdrawn.
Sokolov’s collection of luxury real estate does not end at the “main house of the country. On the same Stone Island and in the same year 2021, he bought two apartments with a total area of 280 sq.. m in the historical complex “Sviyagin Estate,” an Art Nouveau cottage built on the eve of the 1917 Revolution. There are several more dachas of this kind in the neighborhood, and they, too, are iconic in their own way – every Russian citizen has seen them in Soviet films like The Adventures of Sherlock Holmes and Dr. Watson, where they depicted London and other European capitals.
According to the investigation, the ultimate owner of all this real estate is not Sokolov, but Bilyuchenko himself. But if this is true, then Sokolov is a very unusual “drop,” that is, a nominee: they not only write down luxury apartments on him, but also allow him to live in them. According to the leaks from Yandex.Food, Sokolov ordered food for both apartments opposite the Summer Garden, the one that once belonged to Sergei Shnurov and the one in the “Medvedev house.. And in any case, even if he is a “drop,” he must have come from somewhere in Biluchenko’s life.
I started looking for his picture and after a long search in his half-brother’s account I found a picture taken around the time when Satoshi Nakamoto first introduced bitcoin to the world. From the photo the same “Ghost” that I met with in 2019 in St. Petersburg was looking at me, after which I had the materials of the criminal case on the collapse of Wex with Bilyuchenko’s testimony.
It’s important to make a note here. Journalistic ethics forbids revealing the names of sources unless they ask for it. This norm is even enshrined in the Russian law “On Mass Media,” under which a journalist is obliged to give up the name of a source only by court order. This code of ethical and legal rules is designed to protect those who, at their peril, bring publicly significant information to the media. Why did I decide for the first time in my life to break this code and tell you who the “Ghost” was? Because I think that Sokolov is not a “drop” at all, but probably no less a key character in BTC-e/Wex history than Vinnik and Bilyuchenko. And the public interest-the fate of billions that belonged to tens of thousands of ordinary cryptocurrency customers-is, in my opinion, more important than the rule of non-disclosure of sources.
What is known about Dmitri Sokolov? He is slightly younger than Bilyuchenko: when the property was arrested in the spring of 2022, he was 38 years old.. Born and raised in Tyumen. Sokolov has both bold and soft eyes, and he can somehow internally regulate this dualism, then communicating with you trustingly and intimately, then including some Siberian kid from Lenin Street. Nothing is known about his father: his mother remarried and worked in the noughties as a leading document clerk at the local department of the cadastral office.
Sokolov chose a less peaceful profession: he graduated from the Tyumen Police Academy and, around the middle of the noughties, went to work as a detective officer in the organized crime department of the Tyumen Oblast Department of Internal Affairs.. His career ended a few years later, when he got into an accident and sort of hit his colleague in the department, his Tyumen acquaintance told me.. He was fired from the authorities, stayed in Tyumen, and a few years later, in 2014, he got a job as the director of the local chain of alcoholmarkets, The Cranberries.
His ex-colleague recalled in a conversation with me that Sokolov clearly intended to open a similar establishment himself, taking an interest in how the alcohol market worked, but in the end he accepted the role of manager in someone else’s business. “Insanely responsible, very quickly placed people, met all KPIs,” he said.. The chain operated under the same cunning scheme as thousands of similar establishments across the country: you could buy beer, wine, or vodka there at night (Tyumen has a ban on sales from 11 p.m.), but you had to open the bottles as if you were coming to a bar, not a store.. In September 2014, a citizen pulled off this scheme with bottles of Cabernet Tamani wine and Belenkaya Lux vodka at an outlet on the outskirts of Tyumen, and then complained to the Tyumen Oblast Department of Consumer Market. Officials fined The Cranberries, but Sokolov tried to appeal the decision in court and personally went to meetings.
The usual boring life of the director of a chain of booze shops. But even to his colleagues, he didn’t seem like a standard manager.
“Once he took a job at The Cranberries with a young guy who was literally sleeping somewhere under the pipes: he was from somewhere near Tyumen, had gone to prison, and after serving time he didn’t want to go back. The guy got a foothold at work and then constantly raised toasts to Sokolov,” was the story recalled by his Tyumen acquaintance. And he continued: – He’s very unusual, he could go into his world and answer in a way that didn’t feel right.. Creative, could start drawing at work. I read a lot of fiction in English.
Sokolov’s friends were surprised that he tried not to leave any digital footprints: he did not use social networks, he tried to send all his communications via messenger, including Signal, which was absolutely strange to everyone in Tyumen at the time, and he always worried about the security of his password. “At work, he was using a laptop with Linux. I was immediately surprised: this is inconvenient, the same 1C for accounting can not open. He ended up borrowing a Windows laptop from a female employee for work purposes,” said his former colleague at The Cranberries.. He would work late into the night, until 10 p.m., and work alone in his office to the music of his beloved Schnur, whose apartment he would buy five years later.
Working as the director of a chain of booze shops was hardly in line with his ambitions. “Loved pretty things and standing out,” describes his longtime acquaintance. He drove around Tyumen in a Porsche Cayenne, but that was clearly not enough for him.. In mid-2016, he unexpectedly alerted the owners of The Cranberries that he was moving to Moscow to work in programming.. “It sounded amazing.. He also talked about cryptocurrencies once in passing, but at the time they were not on my radar, so I did not understand much,” says Sokolov’s ex-colleague.
After the move, Sokolov stopped communicating with many of his Tyumen acquaintances. “I even thought I’d done something to offend him, so abruptly he ‘dropped off the radar,'” recalls an acquaintance.. Sokolov was indeed registered for some time in Lyubertsy near Moscow, but no later than 2019 he moved to live in St. Petersburg, which he had long loved, trying to go to the northern capital for the holidays. He never opened a public business.. But five years after Sokolov went to court as director of an alco-mart, he bought real estate in St. Petersburg, which, according to conservative estimates, is now worth about 600 million rubles.
All the purchases were made in the years 2020-2021.. At the trial to challenge the seizure of property, his representative brought documents from which it follows that in August 2020, he received income from business activities, sufficient to purchase all of these apartments. There is a record in one of the leaked databases that around that time he actually received over 450 million rubles from the Alfa Capital management company as income from the sale and purchase of securities. And his only official income before that was his salary at the Cranberry Alcohol Market.
Where did he get that kind of money? And did 47news rightly call him a “dollar billionaire”?
There is one strong but unusual thread that connects Sokolov and the Vinnik/Biluchenko exchange. In Tyumen, he had a close friend named Georgy Satyukov: they were so close that when Sokolov took out a loan in the mid-2000s, he listed Satyukov as his guarantor. The two even worked together in the police, though in different departments – Satyukov from the “K” department, which deals with crimes in the computer field. After Sokolov left the police, they maintained their friendship: Satyukov sometimes visited him in the office of The Cranberries, recalled one of my interlocutors.
I don’t know if at the same time as Sokolov or not, but at some point Georgy Satyukov also moved to Moscow – he was transferred to the central office of the Directorate “K”. It was a major promotion: as of May 2019, he already held the rank of police lieutenant colonel and headed a small unit within the department. And it was Satyukov who was one of those police officers who collected information in the first criminal case about the collapse of the Wex exchange, the same one in which Bilyuchenko was the victim and Malofeev was the main culprit in the crash of the cryptocurrency exchange. Satyukov interrogated Bilyuchenko, and he also communicated with some active clients of the collapsed crypto exchange, who were trying to recover their funds. The connection between Sokolov and Satyukov is clearly known to those involved in the investigation of the second criminal case of the Wex crash, the one in which Bilyuchenko is already the main “villain” and Malofeev’s people are supposedly his victims. In addition to the St. Petersburg chorus of Sokolov, the court on the motion of the investigation also arrested the apartment of Satiukov’s relatives. But neither Sokolov nor Satyukov were arrested, unlike Bilyuchenko. Sokolov managed to leave the country even though searches were conducted in his elite apartments.
A fairly simple logical chain emerges. At the end of 2018, the Novocheboksarsk police initiate a criminal case for fraud with the assets of the cryptocurrency exchange Wex, and the central office of the “K” office gets involved in the investigation, along with Georgy Satyukov, who interrogates “admin” Bilyuchenko in Moscow in the spring. The case unfolds to his advantage: the assets of the exchange were stolen by Malofeev’s team, and he is not guilty of anything (although, as I said, exchange customers have claims against him as well). A year later, Dmitry Sokolov, a close associate of Satyukov, declares an unprecedented income of half a billion rubles and in 2020-2021 buys up landmark, luxury real estate in St. Petersburg. And in this case, such a loyal attitude towards Bilyuchenko on the part of employees of the Department “K” of the Ministry of Internal Affairs is quite understandable: when in April 2019 “Sailor” with several other veterans of combat operations in Donbass came to his country house, Bilyuchenko, who was somewhere in the city at the time, decided to hide for a while in the premises of the Department “K” of the local Department of Internal Affairs.
When I started writing to people who might know Sokolov, after a while I was given his new contact – the previous one, through which we kept in touch in 2019, was already inactive. He still prefers secure messengers (the communication was in Threema) and did not want to speak by voice, but, most likely, it was Sokolov: he named the place where we met in St. Petersburg, when he still introduced himself as Evgeny. At one point I directly asked him: did he and Satyukov simply at some point take Bilyuchenko under protection from Malofeev or was he in the exchange project from the beginning? But Sokolov evaded an answer, saying that in his opinion, it is much more interesting who is withdrawing old assets of BTC-e: at the end of 2022, the old purse of the exchange was moved, and from it went 10,000 bitcoins (about $165 million at that time).. “[A number of people from the presidential administration and Rostec are involved in this,” he wrote.. I have no confidence in his words – he did not provide any evidence. In March 2023, some of that money (3,300 bitcoins, or about $90 million) went further down the blockchain, being crushed into smaller amounts in an apparent attempt to eventually take crypto into fiat.
A person who knows Sokolov as a cryptocurrency entrepreneur claims that “he is from a different story altogether” and had nothing to do with either the first (BTC-e) or second (Wex) platform. “They [Bilyuchenko, Vinnik and Sokolov] were familiar with each other, but that is by virtue of the fact that there is a small cryptocommunity in the country. I probably wanted to help because I thought I had strong acquaintances, but it just turned out to be a tragedy,” he wrote. But I have no confidence in those words either.. One thing is clear: a former operative who secretly made millions (if not billions) on cryptocurrencies, moved in with Rotenberg, Timchenko, and Krivonogikh, but lost the war to the powerful “sponsor of the Russian spring” and fled the country. It is such a man as Sokolov, perhaps, can be considered the main hero and anti-hero of crypto-Russia.
Sokolov did not want to talk to me about his past. “I understand what you do and what interests you.. In turn, I can’t understand what I’m interested in here,” he said in a businesslike manner, clearly meaning that it’s not profitable for him to tell the truth about himself. At the time, he challenged the seizure of his luxury apartments in court, arguing that he had nothing to do with either the Stock Exchange or Bilyuchenko.. Sokolov ironically called my questions “scintillating”.. I think when he reads this chapter, he’ll write something like, “I haven’t laughed so hard in a long time.. Or, like a real cipherpunk, will joke that I will never prove that the set of letters and numbers in the Threema messenger was really him.
And Alexey Bilyuchenko ended up agreeing to a pre-trial agreement with the investigation, that is, he pleaded guilty in exchange for a more lenient sentence. In the indictment, the damage he allegedly caused to the Singapore company “Sailor” was estimated at 3 billion, not 16 billion rubles, as it was at the stage of the investigation. Biliuchenko was ready to transfer the money and even gave the numbers of the accounts where the necessary amount could be found. This, of course, was his defeat.. But who thinks about that when you’re facing 10 years in prison.