Another crypto exchange has been added to the long list of digital asset trading platforms robbed in 2018. The platform in question is a London-based crypto exchange called Cubits. According to a recent report, traders cannot deposit or withdraw funds until further notice (Administration). Several other reports also showed that an estimate of about $32.5 million was stolen from the platform by these scammers.
Cubits is Now in Administration
According to the company, three of its clients collaborated with its payment processor to bring about the theft of this huge amount of money. The company has not yet given a full detail as to how such a huge amount of money was stolen right under its nose, nor was the amount of bitcoin held with the exchange revealed at the time. A joint administrator has however been appointed by the company. The joint administrator appointed is Steve Parker and Trevor Binyon of Opus Restructuring & Insolvency.
According to a statement from the company, the exchange hasn’t recovered from the hack and as a result of this, going into administration is inevitable.
Cubits said that the “serious criminal act” had crippled business operations and finally led to the difficult decision to place the company into administration.”
Paysec Scammed Cubits
On how the scam was carried out. It was reported that three Chinese traders made some BTC purchases on the platform, using the Pay Secure Online (Paysec), a payment processor based in Malta. Unfortunately, the funds were never credited to Cubits’ account. As a result of this, the exchange has filed a lawsuit against Paysec to reimburse the €35 million ($39.2 million) supposedly paid to it by the three Chinese traders.
The company described this in a statement which reads:
“The criminal act happened in February 2018 and involved the accounts of three clients. Bitcoins with a market value at that time of approximately €29 million were properly delivered and subsequently withdrawn, with the customers apparently colluding with fraudsters. Dooga has never received the equivalent in fiat from the payment processor responsible for carrying out the transaction.”