Technology

Crypto Exchange Shut Down by Canadian Authorities: $12 Million Still Owed to Customers

Technology

The past few weeks have been fairly bad for cryptocurrency exchanges and things just got worse. A trading platform based in Vancouver known as Einstein Exchange has been shut down the Canadian authorities. The bad news is that the exchange was shut down but still owes $16 million in outstanding obligations.

What Exactly Happened?

The British Columbia Securities Commission on Monday provided a statement which noted the “action to protect customers” of the Einstein Exchange.

On the 1st of November, the regulatory agency sought a Supreme Court order which designated an interim receiver to seize the exchange. The Grant Thornton Ltd, an accounting firm, which is also the same firm that is in charge of the Quadriga exchange proceeding was also appointed. Shortly after the firm was given a go-ahead by the Supreme Court it went ahead to secure Einstein offices and it shut down the exchange officially.

As per the court order application, several complaints were highlighted by the BCSC from customers who were unable to access their assets. On 31st October, Einstein told the commission that circumstances forced it to close down within a period of 2 months and it cited profit shortfalls.

The commission was informed about Einstein Exchange way back in May to possible money laundering through the exchange. However, those concerns were not were not really hugely elaborated. Therefore, the BCSC alluded that Einstein was using the assets of their customers in an “improper” manner.

According to Sammy Wu, who is the commission investigator, the exchange owes its customers $12.4 million which is approximately CAD $16.3 million. Cryptocurrencies amount to $8.3 million (CAD $11 million).

Cryptocurrency Exchanges Face a Few Bad Weeks

Lately, cryptocurrency exchanges have not been having a good time. Crypto derivatives platform, BitMEX last week found itself in a controversy due to the leaking of thousands of user emails in the open. Extreme negligence was cited by the community uproar. According to a number of reports, the exchange somehow forgot to use blind copy (bcc) when sending out newsletters to subscribed users and this led to exposure of user information.

Things got worse for the exchange as their Twitter account was also compromised, because shortly after the user info leakage, their official Twitter account share messages which were quite ominous to their followers.

The unfortunate news is that this wasn’t the only bad incident to hit the crypto exchanges. On 3rd November, DX.Exchange, a cryptocurrency platform powered by Nasdaq also closed its doors. According to an official blog post from the exchange, it had become unstable and this forced the firm to either sell of form a merger.

“The costs of providing the required level of security, support and technology is not economically feasible on our own.” The blog post read.

After the announcement was made, there was a halt in trading and all suspension of all deposits. It is always required that all clients must be returned before the commencement of any sale of merger of a company.

Their blog post provided details of the withdrawal process, which required every customer to send a laundry list of ID checks to a support email and it also provided a deadline of 15th November.

Unless a permanent merger comes up or an outright sale, the exchange is in permanent danger of closure.

Source: https://www.ccn.com/crypto-exchange-canada-shutdown-customers-12-million/

About the author

Noah Joseph

Noah Joseph

Noah is a huge Technology fan and also enjoys all things politics. When he's not writing you can find him losing at chess to his friends.
Email: noah@blog.ca
Phone: +1 416 551-0431

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