Cubits Bankrupt, Withholds Users' Funds

2017
January 7th, 2019
Back Cubits Bankrupt, Withholds Users' Funds

UK-based cryptocurrency trading platform Cubits' executives has officially announced that the company went bankrupt following the criminal act of fraud and hacking of their systems in February 2018. All efforts to recover the lost funds - $33 million in clients' money - have proven unsuccessful since.

Hence, Dooga Ltd. whose trading name is Cubits, has become insolvent and appointed external administration to act on behalf of creditors and "work with those who are owed money by the Company and to collect money owed."

The firm's December press release states that Dooga made every possible effort to recover the funds since February, but contrary to expectations, all efforts have failed.

A Mess At Hand

Company officials have had a hard time coming to terms with the gravity and reality of situation, facing hundreds of furious users - who were being denied withdrawals for weeks - left stumped by conflicting messages...

...On December 11th, Cubits' Twitter account and the official website informed users of the alleged maintenance and that it will be "right back," followed by the 500 error message that appears when the website is down.

Finally, a tweet revealed that the mother company has in fact entered administration. To make matters worse, head of crypto business within the company, Max Krupyshev, left in November right after the financial issues went public.

Dooga's newly appointed administrators have a lot to clean up, as they say their only goal right now is to "achieve the best outcome for creditors generally at the earliest possible date."

"Dooga’s current position is secure, investigations are proceeding and we will be writing to creditors, formally, this week,” said one of the administrators, Steve Parker (the other one is Trevor Binyon, also of Opus Restructuring & Insolvency).

Controversy Deepens

The fatal ruse occurred last February, when a certain three Chinese traders bought Bitcoin on Cubits, using PaySec (Malta-based payment system) which never paid Dooga the fiat money, creating a total debt of $39.7 million. A decision made by Malta's court in August that upheld the third-party order against PaySec colluded with the traders, according to Dooga's claims.

But Cubit's woes do not end there:

The company's payment coordinator, Eloise Debono, has been unmasked as an adherent of the infamous ponzi scheme OneCoin whose malpractice caused a sea of red flags from diverse authorities all around the globe. This was revealed through a senior management's private investigation of Debono's LinkedIn activities.

In an article in 2016, she bizarrely wrote: "OneCoin uses one centralised exchange called OneExchange, where there is a fixed rate for buying and selling. I personally think this is more secure and less volatile."

Source:

"Crypto Platform Cubits Begins Insolvency Procedure After Alleged Hack, Locks Users' Funds", William Suberg, cointelegraph.com, December 12, 2018.

"Cubits is Bankrupt and Witholding User Funds As OneCoin Ties Exposed", Esther Kim, bitcoinist.com, December 12, 2018.

“the company went bankrupt following the criminal act of fraud”

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