Russian Crypto Founder Ivanov-Bilyuchenko Dodges $221M Fine in Shocking Court Reversal

In a dramatic legal twist, convicted Russian crypto entrepreneur Ivanov-Bilyuchenko has seen his $221 million fine overturned—proving once again that blockchain justice moves faster than regulators can track.

The ruling sends shockwaves through the crypto compliance world, where nine-figure penalties typically stick like bad DeFi trades. Observers note the defendant's legal team 'mined precedent more effectively than Bitcoin miners chasing block rewards.'

This case sets a dangerous precedent for financial watchdogs—when even slam-dunk crypto convictions can get rug-pulled by appellate courts. Maybe next they'll start overturning hacks and exit scams too.

Legal recourse for WEX’s clients is lost

According to investigators, Ivanov-Bilyuchenko stopped the owner, his agents, and users from accessing the exchange in 2018. He embezzled  crypto worth more than 18 billion rubles ($221.1 million) in different amounts. 

Under Part 4 of Article 160 of the Russian Criminal Code, Ivanov-Bilyuchenko was found guilty of theft on a very big scale by the Meshchansky Court of Moscow. After the ruling, Singapore-based company World Exchange Services Pte. Ltd., the owner of the crypto exchange WEX, sued and asked for monetary damages. 

He agreed to cooperate with the police before his sentencing and followed through. As a result, he was given a 3.5-year sentence in a general regime penal colony and a 500,000 ($6142) ruble fine. The Moscow City Court supported the first court’s decision, and it became law. 

Now, the Russian Supreme Court’s decision has canceled the civil claim, which was one of the few remaining legal avenues to reclaim part of WEX’s clients’ lost assets.

Since most of the exchange’s crypto assets were long ago moved, mixed, or seized by other parties, and with no clear ownership structure or ongoing compensation fund, users have virtually no path left to recover their deposits. The ruling underscores that the collapse remains unresolved, and clients should not expect any refunds.

US indictment against Bilyuchenko remains dormant 

Outside of Russia, Alexey Ivanov-Bilyuchenko was formally charged by the US Department of Justice (DOJ). According to reports, he had a role in the 2014 Mt. Gox hack, one of the largest crypto thefts in history. 

According to the DOJ, Bilyuchenko and another suspect, Aleksandr Verner, were accused of conspiring to launder approximately 647,000 Bitcoins stolen from the Mt. Gox exchange. 

Even after the high-profile charges, the case has seen little movement since the indictment was unsealed. Bilyuchenko remains in Russia, and there has been no record of extradition, trial, or conviction in the United States. The DOJ documents remain in the archives as active but unresolved indictments. This means the allegations are still legally pending.

Additionally, earlier, the VChK-OGPU Telegram channel, which is close to Russian security agencies, reported that a crypto wallet linked to Alexey Ivanov-Bilyuchenko had lost 6,500 Bitcoins, worth approximately $694 million. These pending cases speak of a fate awaiting Bilyuchenko: prison.

Get $50 free to trade crypto when you sign up to Bybit now