The Canadian Einstein exchange, which was put into receivership a few weeks ago, is now closed completely. What is more, there is no evidence of the funds held on the exchange, reportedly around CAD $16 million.
Einstein Exchange Operated with Deficit
The Canadian market operator is the second significant crash in the country, following the closing of the notorious QuadrigaCX at the beginning of 2019. This time, the loss may be smaller, but the exchange followed a similar scenario of withholding user funds.
The Einstein exchange was ordered to cease operations on November 1, and was taken into custody by the British Columbia Securities Commission. The Grant Thornton legal firm was appointed as interim receiver, tasked with tracking the funds of the exchange.
On November 18, Grant Thornton ended its interim receivership, discovering that the exchange did not hold funds in any known banks. There were additional crypto losses which could not be tracked.
The court-appointed interim receiver for Einstein Exchange has been discharged by the BC court and does not believe Einstein has material assets. Einstein claims that its asset deficit of at least $8-10M is due to credit card and bank draft frauds. https://t.co/cF3agSoUda
— Evan Thomas (@evanmthomas) November 19, 2019
Michael Gokturk, CEO of the now-defunct Einstein exchange, testified that the market held between CAD 8 and 10 million, not the 16 million previously reported. Most of the funds were in crypto assets. However, there was no disclosure of wallets or addresses, and allegedly Gokturk kept the funds not only in controlled wallets, but on other exchanges.
No Sign of Crypto Funds Kept in Custodial Wallets
The only source of knowledge about the Einstein exchange’s funds is a sworn affidavit by British Columbia citizen Sammy Wu,