Despite increased acceptance for the cryptocurrency industry, there are still some governments and mainstream institutions that have kept a close eye on the ecosystem. The spotlight was recently on the United Kingdom when the government shut down an online cryptocurrency trading platform for fraudulent activity.
On 30 June, the High Court in the United Kingdom proceeded to dissolve GPay Ltd for misleading investors and flouting capital controls. The company was formerly called Cryptopoint and had investors from the United Kingdom and several countries outside the jurisdiction of the ERU jurisdiction.
The initial complaints arose when customers were repeatedly asked to use GPay’s online trading platform through ads and banner placements. The biggest issue was that the company falsely claimed to be associated with big-shot entrepreneurs in the field. According to a release from the government:
“The company, which traded as XtraderFX and formerly as Cryptopoint, targeted people in the UK and abroad, advertising its services online and via social media channels. Following complaints, however, the Insolvency Service conducted confidential inquiries into GPay’s activities before investigators uncovered that at least 108 clients claimed they had lost in total just under £1.5 million while using the company’s online trading platform.”
Platform analysis showed that clients were faced with issues with their withdrawals if they did not participate in trading on a routine basis. David Hill, Chief Insolvency Investigator, had a few comments on the entire situation. Hill claimed that GPay had persuaded customers to part with substantial sums of money to invest in cryptocurrency trading platform.
The decision of the court was accepted by legitimate sources as this would prevent other investors from being affected by false pretenses. Initial investigation reports said that almost 108 clients had suffered losses of almost $1.5 million due to the organization. In some cases, clients have lost their capital despite having insurance cover.
GPay ‘s controversial turn of events has made other investors and companies sit down and take note of liabilities related to unchecked ecosystems. The UK Government has urged both new and existing customers to make thorough run-throughs whenever it involves hard-earned capital.