Troubled Vancouver crypto exchange still owes millions, receiver says

What happened: A court-appointed receiver has been discharged from its duties handling the assets of a Vancouver-based crypto-currency exchange

Why it matters: The Einstein Group still owes customers at least US$8-10 million, according to court documents

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A troubled Vancouver-based crypto-currency exchange has a long way to go towards squaring up with customers.

The court-appointed interim receiver charged with handling the assets of the Einstein Exchange Inc. platform after it ceased operations last month says the company still owes customers US$8-10 million, but has less than $45,000 in cash and crypto currency.

Business services firm Grant Thornton Ltd. reached that conclusion after announcing Nov. 22 it had wrapped its work after being tapped by the Supreme Court of B.C. three weeks earlier.

Management at the exchange claims most of that multimillion-dollar deficit stems “from a series of credit card and bank draft frauds that the Einstein Group suffered and that the majority of this loss is made up of crypto-currency assets,” according to court documents.

Grant Thornton said it did not perform forensic work to confirm Einstein’s claim and has not attempted to determine the whereabouts of the stolen crypto-currency.

The B.C. Securities Commission (BCSC) had previously been fielding complaints that customers could not access assets handled by the Einstein Group, which includes founder and sole director Michael Gokturk, Einstein Capital Partners Ltd., Einstein Exchange Inc. and Einstein Law Corporation.

The regulator began investigating Einstein and subsequently asked the court to appoint an interim receiver, Grant Thornton, on Nov. 1.

Court documents state the company ceased operating Oct. 31, leaving $70,000 in back wages owed to workers as well as $130,000 in unpaid severance.

A shareholder and “another individual associated with Einstein” had raised concerns about potential money laundering and improper use of funds, according to earlier court documents.

The BCSC’s own investigation concluded that Einstein owes customers approximately $16.3 million, but Grant Thornton said it did not attempt to verify the accuracy of the regulator’s investigation.

torton@biv.com

@reporton

 

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