The British Columbia Securities Commission (BCSC) Alleges Einstein Exchange Operated as a Ponzi Scheme
The British Columbia Securities Commission (BCSC) has accused the now-defunct crypto exchange Einstein Exchange of operating as a Ponzi scheme after becoming insolvent in 2018. The allegations are directed at Michael Ongun Gokturk, the sole director of three defunct crypto companies: Einstein Exchange Inc., Einstein Capital Ltd., and Einstein Law Corporation.
Evidence of a Ponzi Scheme
The BCSC claims that after becoming insolvent, Gokturk continued to operate Einstein Exchange as a Ponzi scheme. He allegedly accepted deposits and paid out some customers using money and crypto assets from pooled bank accounts and wallets. The regulator also alleges that the exchange manipulated customer dashboards, providing false information about order processing and asset availability.
According to the BCSC, Gokturk’s actions resulted in approximately $19.1 million being deprived from Einstein Exchange’s customers. The exchange was initially launched in 2017 with the aim of providing a trading platform for various cryptocurrencies. At its peak, the three companies collectively held over $34 million worth of cash and crypto assets on behalf of their customers.
Receivership by Grant Thornton
In 2019, the Supreme Court of British Columbia granted the BCSC’s order and appointed accounting firm Grant Thornton as the interim receiver to take control of the assets of the Vancouver-based exchange.
Hot Take: British Columbia Securities Commission Accuses Einstein Exchange of Operating as a Ponzi Scheme
The British Columbia Securities Commission has made serious allegations against Einstein Exchange, claiming that it operated as a Ponzi scheme after becoming insolvent in 2018. The regulator accuses the sole director, Michael Ongun Gokturk, of accepting deposits and paying out customers using funds from pooled accounts and wallets. It is estimated that approximately $19.1 million was deprived from customers as a result of Gokturk’s actions. The exchange also allegedly manipulated customer dashboards to deceive users about order processing and asset availability. This case highlights the importance of investor protection and the need for regulatory oversight in the cryptocurrency industry.
By
By
By
By