The U.K. High Court of Justice has demanded the closure of a cryptocurrency exchange, GPay, so that the interest of the general public can be protected.
GPay Closed for Fraud
A cryptocurrency exchange in the U.K, GPay, has been shut down after clients lost over £1.5 million ($2 million) due to its activities. The cryptocurrency exchange had claimed to have affiliations with some high-profile entrepreneurs so that it could lure in new traders and investors. However, the exchange did not have such connections, and this negatively affected some of the investors.
According to a court statement, GPay was shut down in the public interest on 23 June 2020 in the High Court. The dissolution of the company was conducted by the Deputy Insolvency & Companies Court Judge Baister. The Official Receiver is now set to serve as the liquidator of the cryptocurrency exchange.
While considering the petition, the court heard that the cryptocurrency exchange was operating an online crypto trading platform that was supported by innovative tools and experienced traders, which allowed people, even with zero trading experience, to carry out trades.
The company was trading as XtraderFX and was formerly known as Cryptopoint. The exchange was targeting people living in the U.K and abroad and was advertising its services online and also via social media platforms.
False Advertising
GPay was encouraging customers to use its online trading platform via adverts that falsely claimed that their services were supported and endorsed by popular entrepreneurs in the U.K and other countries.
The Insolvency Service looked into the activities of GPay following numerous complaints from its clients. The investigation led to the discovery that 108 clients lost over $2 million while using the online trading platform provided by GPay.
In certain cases, the clients lost money even after paying insurance designed to cover their losses. When clients then attempted to withdraw their funds from the GPay trading account, they were asked to submit copies of their ID, utility bill, and debit or credit card. However, GPay did not ask for this identification information when they were accepting deposits from the clients. The customers further complained that their withdrawals would be denied if they had not actively traded with the deposited funds.
On its end, GPay did not attempt to defend itself from the public interest petition. After the company was shut down, the court stated that GPay demonstrated a lack of commercial probity. They failed to file statutory accounts and did not have any legitimate presence at the address displayed on its files. From all indications, GPay has abandoned the location.
A Chief Investigator for the Insolvency Service, David Hill, stated that GPay persuaded traders to part with huge sums of money to invest in crypto trading. He went on to state that their activities were nothing but a scam as GPay tricked their clients into using their online platform under false pretenses. In addition, no customer of GPay benefited and made money as their investments have all been lost.
Hill stated that they welcomed the decision of the court to shut down GPay as doing so would protect more people from becoming victims. He warned that the scams should serve as a lesson for people that trade online to conduct thorough research on a platform before they invest their money with them.