Globix Crypto platform requires investor wallet identification
Liquidators for Gibraltar-based Globix are demanding the crypto exchange freeze digital assets and reveal the identity of certain clients.
Seeking $43 million, bankruptcy attorneys secured a court order Tuesday to order Crypto.com, Bitstamp and Kraken to reveal the owners of wallets linked to Globix.
Will Globix Liquidation Threaten Gibraltar’s Crypto Reputation?
The platform’s owner Damian Carreras closed the trading floor’s doors in June 2022. The business model, which allowed investors to select attractive tokens through automated trading, fell through during the crypto winter. Carreras later put the firm into liquidation after struggling to pay investors.
According to Carreras, the exchange had been a victim of cybercrime. A person close to the matter said most of the missing funds were held in Tether.
Courts also prevented Binance, the world’s largest exchange by trading volume, from moving funds from Globix wallets. It moved $18 million from May 2021 to September 2022, claiming it was legal.
The liquidation has called into question Gibraltar’s crypto regulation and reputation as a promising crypto hub. The British territory ratified the regulation in 2018. Earlier this year, it added market manipulation and integrity rules to its rules, called the Distributed Ledger Framework.
According to Digital and Financial Services Minister Albert Isola, the crypto market must operate in a “fair, orderly and efficient manner”, earning the trust that regulated industries enjoy.
The Financial Action Task Force placed the island on its gray list last year for regulatory loopholes that allow money laundering and terrorist financing to slip through.
Major crypto firms remain committed to the region for now
British entrepreneur Richard O’Dell Poulden’s firm Valereum announced plans to buy a majority stake in the Gibraltar stock exchange last year, citing the island’s first-mover advantage in crypto regulation. The acquisition allows traders to buy stocks and other conventional financial products using crypto. The purchase received approval from the Gibraltar Financial Services Commission in October 2022.
On April 21, 2023, Poulden confirmed that Valereum sold Bitcoin mining assets to “focus completely” on the IPO and the launch of the NFT program. At press time, the firm had not indicated whether the Globix liquidation would affect these plans.
Binance, which last year announced four roles in Gibraltar, continues to employ Keiran Reyes as CEO of Binance Exchange (GIB) Limited. As of March 30, the company announced positions in compliance, and indicated that it plans to continue operating in the region.
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