UK Crypto Trading Platform Cubits Goes Under, User Funds Blocked

December 12, 2018 10:06 PM

Per a press release issued December 11, the UK firm Dooga Ltd. – operating under the crypto exchange name Cubits – shut down operations, ostensibly as the result of a February 2018 “criminal act” involving the loss of €29 million.

This follows a tweet Sunday from the company stating that it will resume services as soon as possible following an unexpected outage. Access to the Cubits website has been denied and customers are unable to access their accounts or withdraw tokens or funds.

Per a follow-up tweet, Dooga Ltd. has entered administration, which is roughly the equivalent of bankruptcy in the United States. Dooga claims that on February, scammers deposited €29 million in bitcoin onto the platform, only to have it quickly withdrawn before the platform received the fiat payment from the payment processor.

“Since February, Dooga has made every possible effort to recover these funds,” the press release reads. “Unfortunately – contrary to expectations – these efforts have been unsuccessful up until now. Amongst other measures, Dooga has filed two garnishee orders against the Malta registered payment processor which owes Dooga approx. €35 million, and commenced arbitration proceedings, with the largest share coming from the aforementioned transactions of the three account holders.”

The payment processor mentioned is Pay Secure Online Ltd. Malta Today reported in August that Dooga’s garnishee order was upheld in court.

Other outlets have been quick to point out that Dooga payment coordinator Eloise Debono has previously endorsed OneCoin, a defunct crypto Ponzi scheme, leading some to speculate that this is an exit scheme. Any questions about users’ access to funds will have to be directed toward Opus Restructuring & Insolvency; Steve Parker and Trevor Binyon will oversee the administration process.

Frederick Reese is a politics and cryptocurrency reporter based in New York. He is also a former teacher, an early adopter of bitcoin and Litecoin, and an enthusiast of all things geeky and nerdy.

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