UK based exchange Cubits has declared bankruptcy following $33M scam

16 Dec, 2018 | Updated: 16 Dec, 2018
by Arthur Sillers
News
UK based exchange Cubits has declared bankruptcy following $33M scam

According to News.Bitcoin, UK crypto exchange Cubits has been forced into bankruptcy following a $33 Million scam, shuttering the digital doors on its trading platform, leaving investors in an unclear position.

The exchange fell victim to a fraud on the part of three Chinese investors, who made a payment for Bitcoin through Malta-based Paysec, which was ultimately never remitted, allowing the scammers to cash out millions in unpaid Bitcoin.  Cubit has filed a lawsuit in Malta attempting to recover funds from Paysec, along with a number of criminal complaints against the scam artists, but so far the stolen funds have not rematerialized.

Accordingly, Cubits has ‘made the difficult decision’ of declaring bankruptcy, as well as indefinitely suspending trading, deposits, and withdrawals on its digital lending platform. Investors are understandably frustrated over the uncertain future of funds, but because declaring bankruptcy (or administration in the UK) temporarily protects a company from litigation, an unclear (but numerous) customer base has absolutely no recourse for the time being.

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