Cryptocurrency exchange operated as Ponzi scheme, B.C. regulator alleges
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B.C.'s financial markets regulator is accusing three now-dissolved companies and their sole director of fraud related to the "operation of a purported crypto asset trading platform."
B.C.'s financial markets regulator is accusing three now-dissolved companies and their sole director of fraud related to the "operation of a purported crypto asset trading platform."
The B.C. Securities Commission published its allegations against Michael Ongun Gokturk and his three companies – Einstein Exchange Inc., Einstein Capital Ltd. and Einstein Law Corporation (which, despite the name, was not a law firm) – earlier this week.
The allegations have not been proven.
According to the BCSC, Gokturk and the Einstein companies "committed fraud by lying to customers about a crypto trading platform and misappropriating deposited customer assets for their own speculative investments and personal use."
Specifically, the commission alleges, the companies claimed that the Einstein Exchange:
In reality, according to the BCSC, the companies actually transferred their customers' deposits into various Einstein-controlled accounts, and into Gokturk's personal crypto wallets at other, third-party trading platforms.
The BCSC alleges Gokturk and his companies then further misappropriated those funds by making speculative investments, using them to pay for the platform's operations, and paying out other customers' withdrawals.