Einstein Exchange, a Vancouver-based cryptocurrency trading platform that owes its customers more than $16-million, has been put into receivership by the Supreme Court of British Columbia.
The B.C. Securities Commission (BCSC), which applied for the receivership order in a bid to preserve Einstein’s assets, said in court files that it had received numerous complaints about customers not being able to access their funds.
On Oct. 31, a lawyer representing Einstein told the regulator that the company was planning to shut down the platform owing to “lack of profit,” but had sufficient cryptocurrency holdings to satisfy customer withdrawals, the BCSC said in court documents.
The exchange’s website has since been shuttered, and bankruptcy, insolvency and restructuring service firm Grant Thornton Limited has been appointed as the interim receiver.
Einstein chief executive Michael Gokturk did not immediately respond to a request for comment.
The shutdown comes in the wake of the bankruptcy of Canadian cryptocurrency exchange QuadrigaCX, which left 76,000 users owed $214.6-million in cash and cryptocurrency after the company’s CEO and sole director died last December. Gerald Cotten was 30 when he succumbed to complications related to Crohn’s disease while on his honeymoon in India.
The Canadian Securities Administrators (CSA), an umbrella organization of provincial securities regulators, and the Investment Industry Regulatory Organization of Canada (IIROC) proposed new rules in March to curtail risks associated with cryptocurrency trading platforms, but the measures have not yet come into effect.
The BCSC said in a news release Monday that it has not authorized any cryptocurrency trading platforms to operate as exchanges.
“The BCSC, along with other Canadian securities regulators, continues to urge Canadians to exercise caution when buying or selling any crypto-assets due to various risks, including the loss of some or all of their investment,” the regulator said.
Einstein customers looking for information about the status of their accounts should contact Grant Thornton, the BCSC said.
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