The UK Supreme Court has ordered the closure and liquidation of GPay, a cryptocurrency platform that was defrauding merchants.
On June 30, the British government's insolvency office published a notice explaining that GPay Ltd, which trades as XtraderFX – formerly known as Cryptopoint – had closed after “losing” £1.5 million ($1.8 million) of investor funds.
At least 108 customers lost cash, even after opting to take out insurance to cover any future financial losses. When traders tried to withdraw any funds from the platform, they hit a wall, facing ID and utility document demands.
The XtraderFX website is now closed, but cached versions of the domain reveal promises of an easy crypto trading platform, as well as a mining platform.
The platform promised to provide a way for those with no prior experience in cryptocurrency trading to invest, with the support of experienced traders and computational tools that would make job .
However, cryptocurrency scams, fake initial coin offerings (ICOs), and exit scams are widespread in the community. While regulators around the world have begun to try to combat fraud, unless a crypto exchange is registered with a government agency like the U.S. Securities and Exchange Commission (SEC), investors often trade at their own risk.
GPay targeted individuals in the UK and elsewhere through online advertising campaigns, heavily utilizing social media.
Trustpilot users complained about deposits made without permission, accounts closed without warning, and harassed via phone calls, urging them to make additional investments.
The use of well-known, trusted individuals to falsely advertise crypto programs is rampant. In this case, some users said they were fooled by a fraudulent ad for the TV show Dragons' Den on Facebook.
Martin Lewis, the founder of MoneySavingExpert, has also been fighting the illegal use of his image to promote such schemes for years.
The financial expert had previously taken Facebook to court for misusing his name and image in thousands of ads on the social network. Lewis and Facebook settled the case after Facebook promised to launch a dedicated fraud and donate £3m to a Citizens Advice project to help tackle scam.
GPay was officially shut down on June 23, and UK officials say the order was issued “in the public interest.” The company did not appeal the decision.
