The British Columbia Securities Commission (BCSC) has acted to protect the investors of one BC-based cryptocurrency exchange while launching an investigation against a second.
On October 31, 2019 the counsel representing the Vancouver-based Einstein Exchange (Einstein) had informed the BCSC that its client had planned to shut down within 30 to 60 days due to “a lack of profitability.” The company’s website subsequently went off-line.
On November 1, 2019 the regulator, acting on complaints from investors alleging they had not been able to withdraw their funds from Einstein, applied to the Supreme Court of British Columbia for an order appointing an interim receiver to preserve and protect the company’s assets. The Court granted the application and appointed Grant Thornton Limited as interim receiver. Grant Thornton entered and secured Einstein’s premises, later that same day.
According to an affidavit posted on Grant Thornton’s website, a BCSC investigator’s analysis showed Einstein owed its investors roughly $16.3 million CAD in cryptocurrencies and fiat currency. The same document also raised concerns regarding potential money laundering.
In a separate action on November 4, the BCSC launched an investigation of Nanaimo-based ezBtc.ca (ezBtc), after investors alleged they were unable to access their funds after the company’s website went dark in late October. Media reports place potential losses in the millions of dollars.
The regulator has advised those with funds invested in Einstein Exchange to contact the receiver, Grant Thornton. It has also advised investors in ezBtc to consult a lawyer to consider their options regarding returning their money.
BCSC staff warn they have not authorized any crypto asset trading platforms to operate as an exchange in the province. They urge investors to exercise caution when buying or selling any crypto-assets due to various risks, including the loss of some or all of their investment.
For more information, please call Barbara Hendrickson at BAX Securities Law (416) 601 -1004. This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.