Regulators seize Einstein Exchange amid money laundering concerns

Daniel Fowler
November 6, 2019

Cryptocurrency shopping and selling build of living Einstein Exchange, basically based in Vancouver reputedly shut up store at the tip of ultimate month, despite telling the British Columbia Securities Commission (BCSC) that it'd be shutting down within two months, The Province experiences.

Other clients also claimed to be owed thousands of dollars and two of Smillie's former business associates are also suing him, alleging that he owes them 4,700 Bitcoins - worth more than US$43.7 million [AU$63.3 million] at current prices. On October 31, a law firm representing Einstein Exchange told the BCSC that it would shut down in 30 to 60 days owing to "lack of gain". The BCSC was able to reportedly determine that the company owes over $14 million in digital currency and cash to its customers, but adds that the company's founder, Michael Ongun Gokturk, has not been willing to cooperate with the investigation.

The Vancouver Exchange office is already closed, and the site is now unavailable.

Canadian regulators say they received numerous complaints about the exchange from customers that were unable to retrieve their funds.

Einstein Exchange mentions in its court document that it had sufficient cryptocurrency funds to comply to the withdrawal requests of its customers.

The exchange had tried to promote itself to a US-basically based investor, nonetheless the deal failed to reach to fruition, and Einstein chose to shut down.

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In what is perhaps the most interesting aspect of the case, the affidavit states that BCSC staff believe that Einstein Exchange was facilitating the trading of securities.

Last week the BCSC applied to the Supreme Court of British Columbia for an order appointing an interim receiver to preserve and protect any assets on the troubled exchange.

Having obtained a court order, the accounting firm entered and secured an office belonging to the company the same day.

The affidavit says that Einstein Exchange traded 19 forms of cryptocurrency including; Bitcoin, Ethereum, Bitcoin Money, Monero, and Litecoin. QuadrigaCX, another crypto exchange, reportedly owes its clients $200 million after owner Gerald Cotten died of Crohn's disease. While Einstein's website remains inaccessible for all users, the BCSC clarified that any creditor updates and relevant documentation will be provided in the following link.

On October 31 the BCSC demanded to demand proof of where the exchange became as soon as conserving its cryptoassets.

The official investigation against Einstein Exchange began on May 6, 2019.

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