UK court orders crypto exchange to shut down after clients lose $2M

In a recent statement, the U.K. government stated that 108 of their clients had lost a total of about £1.5 million ($1.9 million) through GPay.

A U.K. court is ordering GPay to shut down on allegations that 108 clients lost £1.5 million or $2 million through the crypto exchange.@paddybaker_ reportshttps://t.co/XIkfBOAQV7

— CoinDesk (@CoinDesk) July 1, 2020

Although clients had the option to deposit without completing know-your-customer (KYC) processes, GPay asked for various ID documents to stop clients from withdrawing funds. GPay also sold insurance to customers in order to protect them from trading losses, but the exchange did not always payout. GPay did not contest the dissolution order. 

A member of the U.K. Insolvency Service stated that GPay persuaded clients to part with large amounts of money to invest in cryptocurrency trading. This was a scam since GPay deceived its clients to use their digital platform under false pretenses. In 2018, the U.K.’s financial watchdog warned that GPay was offering financial services without its permission. 

GPay had first faced its first dissolution order in November 2018, but this was discontinued in January 2019. GPay extensively promoted itself on social media and falsely claimed to be supported by Martin Lewis, the founder of a popular finance website in the United Kingdom.

Lewis stated on the news: “I don’t know whether to dance a jig that these despicable scum have been shut down or cry that they managed to take so many people’s money.”