For a cryptocurrency exchange that has seen its bitcoin price trade at a market premium since launch, the spike to nearly $9,000 on the WEX exchange on Wednesday was an outlier.
Some background: in July of last year, U.S. and international law enforcement took aim at BTC-e, the long-running – and long-mysterious – cryptocurrency exchange. In a dramatic turn, a Russian national and one of BTC-e’s suspected employees was arrested and charged with laundering billions of dollars while American regulators moved to slap the exchange with a massive $110 million fine.
In the months since, BTC-e has returned under the WEX banner while Alexander Vinnik has been the subject of a legal tug-of-war between Russia, the U.S. and, now, France, each of which is seeking to extradite him. Vinnik has that he is innocent of the charges levied against him.
Yet Wednesday’s move is a curious one, with the price of bitcoin (against the U.S. dollar) on WEX climbing to $8,999, as shown in the graph below:
By contrast, CoinDesk’s Bitcoin Price Index (BPI) hasn’t climbed above $6,396 since the start of trading on July 11.
The sharp increase started around 16:00 (UTC) from a comparatively high price point of about $7,800. To put things in perspective, Coinbase, a competing US-based crypto exchange, featured bitcoin prices throughout the entirety of the day between the range of $6,200 and $6,400.
So what gives?
As might be expected, the unexpected surge stoked speculation that WEX is either insolvent, suffering banking problems or gearing up for a calculated exit. BTC-e’s long-mysterious reputation and links to the now-defunct dark market Silk Road may arguably have provided fuel for such allegations.
The move also comes a day before WEX will undergo a planned maintenance period scheduled to last for 2 hours, according to a post on Twitter from July 9.
For its part, the exchange hasn’t commented on its public-facing channels about the price spike, and a message sent to WEX’s official account on Twitter wasn’t returned by press time.
Bitcoin image via Shutterstock