In many circumstances, a cryptocurrency exchange shuts down because regulators determine that it was not playing by the rules or, in some unfortunate cases, the exchange operators decide to run off with their users’ money. The case of Israeli crypto exchange DX.Exchange and its sudden closure is a little different, though, as it was forced to halt its operations for a different reason. The exchange’s employees wanted the company to be shut down.
DX.Exchange was forced to file for bankruptcy after 78 of its former and present employees went to court to request the closure. They assert that the company behind the exchange, CX Technologies, Ltd, was not operating in accordance with regulations and was simply the revival of a previous exchange that had been raided by the FBI in January of last year.
DX.Exchange asserts on its website that it is based in Estonia, but the employees were able to show different data. They also showed that the company was nothing more than a repeat of SpotOption, which had been suspected of being involved in a massive multibillion-dollar binary options scam. SpotOption executives continue to deny they did anything wrong.
As evidence, the employees presented several key pieces of information. First, 55 of the employees used to work for SpotOption before being hired by CX Technologies to work with the exchange. That, in itself, isn’t enough, but they also showed how the two entities occupied the same office space and that pension plans associated with SpotOption were transferred to CX Technologies.
CX Technologies has a difficult time supporting its assertion that it has no ties with SpotOption. The former is partially owned by Daniel Skowronski, who also serves as its CEO, and also by Malhaz Pinhas Patarkazishvili, who controls 90% of the company. Patarkazishvili also goes by Pini Peter, who is known to be the former owner of the defunct SpotOption platform.
If that weren’t enough evidence, there’s more. A company out of Cyprus with ties to DX.Exchange, MPS Marketplace Securities Ltd., lost its license this past September for violating securities laws in the country. Following the paper trail, MPS Marketplace was previously known as SpotOption Exchange, Ltd. and S.O. SpotOption, Ltd.
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