UK-based crypto platform Cubits could be facing closure

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This past February, the UK-based cryptocurrency trading platform Cubits was one of several that lost a considerable amount of money from fraudulent activity. According to the company, scammers had been able to get away worth almost $33 million and the exchange has not been able to fully recover ever since. Now, the company has filed for administration in the UK in order to settle its financial burdens.

According to a press release by Dooga Ltd., the legal name of the Cubits exchange, from this past Tuesday, the company never recuperated the lost money and has struggled to survive.  It said that it has brought in the administrators “to work with those who are owed money by the Company and to collect monies that are owed.”

Filing for administration is similar to bankruptcy protection. It allows a company to bring in outside administrators who work on behalf of creditors and help the company resolve its financial issues.

One of the administrators who will assist the company, Steve Parker, explained, “Our goal 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.”

Parker is joined by Trevor Binyon. They are both employed by Opus Restructuring & Insolvency and will jointly administer the activity for Dooga.

This past Monday, the Cubits platform went offline, which led users to start showing concern over a possible closure. At the time, Cubits said on Twitter that the outage was due to “maintenance,” but the company’s website later began producing a general error and the subsequent administration announcement was made.

Users, some of whom had been trying to make withdrawals for weeks, were stunned to learn that their funds had been frozen. It became apparent that the sudden outage was not a complete surprise to company officials, who must have been working on the plan for at least a couple of days.

This past February, three traders out of China purchased Bitcoin Core (BTC) through the platform via Pay Secure Online Ltd. (PaySec), a payment processor located in Malta. However, PaySec never forwarded the funds to Dooga. The result was a debt of $39.7 million for Dooga, despite a Maltese court order that was meant to force PaySec to make the reimbursement.

How much truth there is to the claims is anyone’s guess. Reviewing information on Dooga, the company’s payments coordinator, Eloise Debono, is reportedly an endorse of OneCoin, a known Ponzi scheme, and the company’s head of crypto, Max Krupyshev, left the company just ahead of its closure.