[2019-10-05] Canadian crypto exchange owner vanishes as regulators close in

figmentofmyass

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Quote from: Steamtyme on November 20, 2019, 01:08:13 PM

There's a few articles out there but this one has it covered. Interstingly enough they point to Fraud from credit and debit deposits as being a large part of the issue. I don't really buy it though as you would think you would shut down most of the deposit means that were causing the fraud before it got out of hand.
https://globalnews.ca/news/6184883/bitcoin-exchange-bc-funds-missing-receiver-says/

you'd think so, but desperate companies act desperately sometimes.

it reminds me of full tilt poker in 2011. for many months, they were unable to process millions in incoming deposits, but they were crediting the deposits to player accounts to keep operations running smoothly. players figured out what was going on and started defrauding them on deposits because withdrawals were flowing fine. full tilt intended to find a payment processor who could collect all the deposits but in the meantime, the DOJ shut them down and revealed they were totally insolvent. the jig was up.

if not for pokerstars buying them out, full tilt players would have lost everything. sadly, i don't think anyone will be buying einstein exchange's toxic debt.....

Steamtyme

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Well looks like the Einstein exchange is likely the worst of it all so far. Was reading up a couple days ago and they apparently have no more than 45,000 in assets against 16 million owed to customers. What a shit show. I'm glad I stopped using the exchanges in Canada after Quadriga, and have only done a few transactions with buy/sell providers that so far haven't had any issues. There's a few articles out there but this one has it covered. Interstingly enough they point to Fraud from credit and debit deposits as being a large part of the issue. I don't really buy it though as you would think you would shut down most of the deposit means that were causing the fraud before it got out of hand.
https://globalnews.ca/news/6184883/bitcoin-exchange-bc-funds-missing-receiver-says/

Harlot

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Quote from: Bitcoin_Mafia_Me on November 05, 2019, 11:15:52 AM

This kind of crap does more damage to crypto than its use in criminal activities. How are mainstream investors supposed
to be confident that they can safely trade on exchanges when exit scams like this keep happening?

I do think BCSC is partly to blame here, I don't know what their process is when it comes to handing out licenses for exchange but having 3 exchanges failing in a year already shows that there is something wrong when it comes to them giving out licenses for exchanges like this. Maybe if they have some kind of a strict guideline or a thorough screening process for these kinds of businesses then we can expect some trustworthy exchanges in Canada running their operations. Other than that they do need to strictly monitor their activity just like what they are doing in the other markets since the crypto market is big already and they need to consider the risk of illicit activities happening around it which is a lot.

hello_good_sir

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Quote from: joniboini on November 07, 2019, 12:51:19 AM

Quote from: hello_good_sir on November 05, 2019, 04:58:21 PM

Even banks don't even have these amount of issues, and they are one of the reasons why a lot of investors where drawn to the crypto market over more traditional investment options. When are people going to learn to not keep funds in exchanges...

You can't compare a regulated market with an unregulated market. Unless the government put a clear framework on how exchange works, and as long as people don't do their DD (which happens all the time), then shit like this will stay.

This is exactly my point. Why are companies that have millions of dollars in their wallets, and deal with millions each day, not as closely regulated as banks, who basically do the same? I feel like a lot of exchanges are literally just able to run away and not much happens to them, which we never see that with banks.

It's actually pretty astonishing that this is still happening to our industry, come on governments! If you can fuck us with taxes, surely you can regulate some exchanges!

joniboini

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Quote from: hello_good_sir on November 05, 2019, 04:58:21 PM

Even banks don't even have these amount of issues, and they are one of the reasons why a lot of investors where drawn to the crypto market over more traditional investment options. When are people going to learn to not keep funds in exchanges...

You can't compare a regulated market with an unregulated market. Unless the government put a clear framework on how exchange works, and as long as people don't do their DD (which happens all the time), then shit like this will stay.

Not to mention that the crypto industry is still young, compared to banks with their decade of history (including failures here and there).

Steamtyme

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I'm so out of the loop, lol. I just read this today and hadn't paid enough attention to even know Einstein Ex was Canadian. I was only minimally using Quadriga when it failed, and have found other options to both buy and sell BTC against CAD if I need to. EzBTC, has been a shitshow for a couple years if I'm not mistaken, surprised there hasn't been more action taken on that front tbh. I looked into them a few times, each time I was like" Is this that same one with the Smiley guy" and sure enough it was. Glad I never got sucked into their marketing bonuses and had funds there.

Honestly I don't want a bank, I'm not looking for some over regulated exchange to move funds around on. What I do think needs to start happening with any start-up exchange are publicly known wallets. It can then be verified that the funds are there, whether coldstorage or not. Something moves you know about it, books can't balance you know about it. I almost got burned by an other exchange a few weeks ago, but managed to comply. So know if I need to use them, it's in and out. No coin left behind.

Also the action taken is to late, they aren't protecting anyone apart from potential new victims.

hello_good_sir

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Another day, another exchange controversy. I feel like every week or so an exchange gets hacked, or an owner runs away, or another one leaks some form of user data.

Even banks don't even have these amount of issues, and they are one of the reasons why a lot of investors where drawn to the crypto market over more traditional investment options. When are people going to learn to not keep funds in exchanges...

I think in the recent month I've seen 2 articles about exchanges in Canada shutting down.

figmentofmyass

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Quote from: Bitcoin_Mafia_Me on November 05, 2019, 11:15:52 AM

This kind of crap does more damage to crypto than its use in criminal activities. How are mainstream investors supposed
to be confident that they can safely trade on exchanges when exit scams like this keep happening?

i reckon the BCSC shutting down rogue exchanges will deter others from exit scamming in the future. the canadian government had been completely hands-off before the quadrigaCX collapse. now they seem to be investigating bad actors and trying to clean up the space.

if i were a canuck, i would probably use kraken's CAD market. not many reputable exchanges left in canada---in fact, there never have been.

Bitcoin_Mafia_Me

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BitcoinerX.com - PM for Ad Info

This kind of crap does more damage to crypto than its use in criminal activities. How are mainstream investors supposed
to be confident that they can safely trade on exchanges when exit scams like this keep happening?

In the wake of the QuadrigaCX imbroglio, two more Canadian crypto exchanges are under investigation. Regulators are
investigating numerous complaints and it appears that the owner of at least one of the exchanges has disappeared, taking
users’ funds with them.

The British Columbia Securities Commission (BCSC) has taken action to protect the customers of two Vancouver-based
crypto exchanges, Einstein Exchange and ezBtc.

The websites for both have recently gone dark leaving customers fearing for their digital assets.

Read full article: https://micky.com.au/another-canadian-crypto-exchange-owner-vanishes-as-regulators-close-in/

Topic: [2019-10-05] Canadian crypto exchange owner vanishes as regulators close in (Read 209 times)