Cryptocurrency exchange bites the dust

Business | Gary Poon 15 Mar 2019

Gatecoin, a local cryptocurrency exchange, was granted a winding-up order by a court in Hong Kong as an unnamed user said he stood to lose nearly HK$100,000 that he invested in the platform.

The firm said in its website that it had started working with a payment service provider, which is regulated by a French regulator, in September.

However, the provider failed to process most of its transfers in a timely manner which in turn almost paralyzed their operations and a large part of their funds were retained.

Gatecoin said it tried to manage the losses by replacing the provider with alternatives to process their clients' transfers and begun to take legal action against the provider, but was advised that it is unlikely that it would be able to recover the funds from them in full.

The notice did not mention the name of the provider nor did it explain in detail about why their funds were retained.

Its website only displayed the notice and had since stopped operating.

Catecoin's Telegram channel had also not been updated since November.

Gatecoin, which deals in Bitcoin and Ethereum tokens, was founded in 2013.

The co-founder and chief executive officer Aurelien Menant claimed that he is preparing the related documents to give to the provisional liquidator.

In order to avoid being sued for defamation, it had removed the provider's company name from the notice.

Menant disclosed that his Hang Seng Bank account was blocked in September 2017 almost US$10 million (HK$78 million) in cash was returned to him.

Meanwhile, the unnamed user said that he could not connect with staff of the platform and expected his investments would not be returned to him.

Gatecoin was hacked a few years ago and investors lost a total of US$20 million, according to him.

Bitcoin had plunged almost 80 percent from its highest point of US$19,666 per coin in December 2017 to US$3,847 per coin yesterday, according to the US-based Coinbase.

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