Canadian Regulator Seizes Einstein Exchange Which Owes Customers $12.4M

Wilfred Michael 

Wilfred Michael

News reporter

05 November 2019,
09:44
Canadian Regulator Seizes Einstein Exchange Which Owes Customers $12.4M

The British Columbia Securities Commission (BCSC) announced Monday that it had taken action to protect customers of Vancouver-based cryptocurrency platform, Einstein Exchange.

According to a press release by the BCSC, the decision to act was followed by a series of complaints from customers of Einstein Exchange who were no longer able to access their assets on the platform.

A lawyer for the exchange had told customers on Oct 31, that the platform would shut down within the next 30 to 60 days after failing to make a profit, and did not supply information regarding how customers could get their funds.

However, the BCSC stepped in to protect customers by obtaining a court order to appoint a popular accounting firm, Grant Thornton, to take over assets and properties belonging to Einstein Exchange.

Further findings reported in an affidavit by BCSC Enforcement Divison Lead Investigator, Sammy Wu, also confirmed that a review of the company’s account as of Sept. 18, 2019, shows that they owed customers about $12.4 million (CAD 16.3 million).

The exchange only filled customer’s withdrawal requests depending on the fiat and cryptocurrencies positions as the operators used the pool of funds for both deposits and withdrawals.

Einstein Founder, Michael Ongun Gotkurk, who also allegedly mismanaged user funds, failed to respond to calls to meet with the investigator while the exchange’s offices in Vancouver had its elevator locked for all floors.

Meanwhile, an investigation into the incident is reportedly ongoing with customers asked to contact Grant Thornton for details about their accounts with Einstein Exchange with the slight possibility that they’d get at least a portion of their assets at the end of proceedings.

The latest development in Canada marks the second-high profile defunct of a cryptocurrency exchange. Earlier this year, reports had it that another exchange, QuadrigaCX lost its founder, Gerald Colten, who was allegedly the only person who had access to the private keys for crypto assets worth $190 million.

 

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