Canadian regulator captures complex cryptographic exchange

The British Columbia Securities Commission has taken control of a cryptocurrency purse that is expected to cost its clients more than $ 12 million. Einstein Exchange had planned to close due to complaints, lawsuits and money laundering investigations. The Canadian regulator has also taken action against another cryptographic exchange after receiving several complaints.

See also: OSC Commissioner Demystifies Arguments Against Bitcoin and Bitcoin Green-Lights Fund

Trade seized

The British Columbia Securities Commission (BCSC) took control of a Vancouver-based exchange of cryptocurrency. The regulator announced Monday that the Supreme Court of British Columbia had granted its "interim naming order order to preserve and protect the assets of Einstein Exchange." Grant Thornton Ltd., the court-appointed interim receiver, has local Einstein Exchange on Nov. 1, the commission revealed.

The documents filed in court indicate that the BCSC had received numerous complaints regarding the inability of clients to access their assets during the exchange. Peter Brady, Executive Director of the BCSC, told CBC News: "We have sent information requests twice to the exchange and we have not received a response," adding that Oct. 31:

We then spoke to the company's lawyer and learned that the exchange was meant to close in 30 to 60 days due to a lack of profit. Subsequently, the lawyer withdrew, which worried us.

Brady noted that the commission had also informed the federal security forces of their concerns about possible money laundering on the stock exchange. The commission began investigating the exchange in May.

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The BCSC is the independent provincial government agency responsible for regulating financial markets in British Columbia. The regulator pointed out that it had not allowed any companies to operate as a cryptocurrency exchange. However, he granted registration to a fund manager for the operation of a crypto investment fund and approved a bitcoin trust.

L & # 39; investigation

Einstein Exchange was established in December 2017 by Michael Ongun Gokturk, a resident of British Columbia, the sole director of the stock market. Einstein proposed trading 19 crypto-currencies against the USD and accepted customer deposits in CAD, USD and cryptocurrencies.

In an affidavit, Sammy Wu, a senior investigator with the BCSC Law Enforcement Division, said, "In the opinion of the BCSC staff, the trading platform operated by Einstein involves the securities trading. "Pursuant to Section 144 of the Securities Act, Wu has requested financial information from the Exchange, including its fiduciary and cryptocurrency balances, and the locations where its securities are held. The exchange did not provide any of this information and two hours after Wu made the request, his counsel informed him that he no longer represented Einstein, but Wu learned the plan. closing the stock market and his unsuccessful attempt to sell to an American company his affidavits.It thinks that Einstein misused the assets of his clients.

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Unable to obtain the necessary information from the lawyer, Wu went personally to the exchange office to find that the elevator was locked for all floors, the affidavit said. "I called Gokturk's phone number listed on their website and the registration indicated that not all of their agents were available. I called Gokturk and his voicemail indicated that he was not available and that he had to send a text message since he was not checking voicemail. I sent him an SMS, tells Wu.

BCSC staff determined that Einstein Exchange owed its clients more than C $ 16,322,705 (approximately C $ 12,398,726), of which C $ 11 million in cryptocurrencies and approximately C $ 5 million in cash . While Einstein Exchange claimed to have "enough cryptographic assets to respond to customer withdrawal requests," the regulator pointed out that exchange lawyers had refused to specify the location of these assets.

Complaints and lawsuits

According to CBC News, Einstein Exchange is also facing two civil suits filed last month, for which Gokturk has not yet filed a response. The first lawsuit was brought by Sino Allied, of Hong Kong, alleging that Einstein Exchange had repeatedly failed to pay the million dollars owed for the purchase of the fastener.

The second lawsuit was filed against Gokturk by Vancouver tech entrepreneur Scott Nelson, who claimed he had not been paid for the transfer of 50 BTCs. The contractor claimed that Gokturk had told him that he would transfer money, but that he "repeatedly accused him of technical problems of his failure," and then stated that he would give him a draft. bank, but has never been delivered. In addition, the press briefing reported that a default judgment had been rendered in April against Gokturk and his exchange for sums due on an American Express credit card.

In addition to Einstein Exchange, the BCSC would investigate complaints about another cryptographic exchange, Ezbtc, based in Nanaimo. A spokesman for the BCSC told reporters that the regulator had taken measures against the exchange because "the assets of the customers are in danger", noting that several complaints had been received about this exchange.

What do you think of the BCSC that seized Einstein Exchange and took action against another? Let us know in the comments section below.

Warning: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement or sponsorship of products, services or companies. does not provide investment, tax, legal advice or accounting advice. Neither the company nor the author is liable, directly or indirectly, for any damage or loss caused or presumed to have been caused by or in connection with the use or reliance on any content, goods or services. services mentioned in this article.

Images reproduced with kind permission of Shutterstock and the BCSC.

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Kevin Helms

A student in Austrian economics, Kevin discovered Bitcoin in 2011 and has always been an evangelist. His interests include Bitcoin security, open source systems, network effects and the intersection of economics and cryptography.

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