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Einstein Crypto Exchange Seized by Canadian Securities Regulator
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2019-11-05 05:11:34
Canadian securities regulators have seized control of the Einstein cryptocurrency exchange.
The British Columbia Securities Commission (BCSC) announced Monday that it had filed to take control of Einstein Exchange after the platform said on Oct. 31 that it planned to shut down its operations within the next 60 to 90 days. Einstein owes its customers $12.4 million ($16.3 million CAD), according to a court filing.
The Supreme Court of British Columbia granted the BCSC’s order and appointed accounting firm Grant Thornton as interim receiver to take control of the Vancouver-based exchange’s assets, going so far as to authorize Grant Thornton to take possession over any of Einstein’s properties and assets. A court order authorized Grant Thornton to forcibly enter any of Einstein’s business premises if necessary.
The firm entered and secured the premises of Einstein Exchange on Nov. 1.
According to the BCSC, the commission received a number of complaints from customers who were unable to access their assets on Einstein Exchange. A lawyer representing the platform told the customers it would shut down in the coming months as the exchange had not been able to make a profit on Oct 31, according to the BCSC statement.
It’s the second time in the last year a Canadian crypto exchange has folded. In a more spectacular and widely consequential case, QuadrigaCX collapsed earlier this year after its founder and CEO, Gerald Cotten, reportedly died due to complications of Crohn’s disease. He had sole control of the exchange at the time of his death.
In the Quadriga case, Big Four auditor EY is currently acting as the bankruptcy trustee for the exchange’s jilted customers. To date, the firm has recovered about $35 million from third-party payment processors and in assets from Cotten’s estate. EY is looking to recoup nearly $200 million for potentially as many as 115,000 customers.
Einstein CEO Michael Gokturk did not immediately return a request for comment. Einstein’s website was not accessible as of 21:00 UTC.
Michael Gokturk image by Marc Hochstein for CoinDesk