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The British Columbia Securities Commission (BCSC) announced through a blog post that it has taken action against a Canadian crypto exchange firm called Einstein Exchange. The BCSC is an independent provincial government agency that is in charge of regulating capital markets in the Canadian state of British Columbia.
The BCSC said that it has taken the steps in order to protect the customers of the cryptocurrency exchange, which had stored their funds with the exchange. On October 31, the firm announced that it was going to shut down its operations within 2 to 3 months. A total of $12.4 million ($16.3 million CAD) were owed by Einstein Exchange to its customers.
The blog post issued by BCSC states that the watchdog has obtained an order by the Supreme Court of British Columbia which allowed an interim receiver to be selected who could preserve and seize any digital assets owned by Einstein Exchange. In this regard, the court has specified Grant Thornton Limited as the appointed interim receiver to monitor the whole seizure process. This resulted in Grant Thornton Limited taking effective control of all operations previously run by Einstein Exchange.
The firm’s domain name (einstien.exchange) has also been occupied by the interim receiver. Additionally, the customers have been directed to either send their emails to [email protected] or simply visit the interim receiver’s website for any information regarding Einstein Exchange.
The blog post by BCSC mentions that the watchdog has acted against the defaulting crypto exchange when it started receiving a number of complaints from a number of customers who said that they could not access the various trading services of exchange.
Virtual Assets Nowhere to be Found
Einstein Exchange mentions in its court document that it had sufficient cryptocurrency funds to comply to the withdrawal requests of its customers. However, the BCSC objected that the platform’s lawyer made no mention of the location of the virtual assets that the court document was referring to.
The BCSC’s investigator, Sammy Wu, also states in the affidavit that after investigating the records at the exchange, he believes that Einstein Exchange was misusing the funds associated with its customers.
While Einstein Exchange is not the first Canadian crypto exchange company to go into oblivion recently (last year, QuadrigaCX was also shut down after the death of its CEO, Gerald Cotton), it is the first case of a company that nears bankruptcy and as a result got seized by the authorities.