Liquidators have been called in to shut down an Australian cryptocurrency exchange, which could see investors lose it all due to lack of regulation.
Key points:
- A major Australian cryptocurrency exchange is being liquidated
- It is the second cryptocurrency exchange to collapse in two months in this country.
- Analysts say that consumers should be aware of the risks of leaving money on crypto exchanges due to a lack of regulation.
The CEO of Melbourne-based cryptocurrency exchange MyCryptoWallet, Jaryd Tyson Koenigsmann, appointed the liquidators SV Partners on Friday, December 3, according to ASIC documents.
MyCryptoWallet was established in 2017 and previously claimed that it had signed up 20,000 customers.
The trading platform allowed people to buy and sell cryptocurrencies such as bitcoin, ethereum, XRP, and litecoin.
In April, it was also understood that ASIC was investigating multiple complaints about MyCryptoWallet.
The company's accounts were frozen in 2019 after a dispute with NAB.
SV Partners will publish its first creditor report on December 17. The administrators also look for a buyer to acquire the "technological infrastructure" of the company.
MyCryptoWallet is the second cryptocurrency exchange to fail in two months. In October, Blockchain Global Limited collapsed, owing investors $ 21 million.
Investor Warning
Unlike banks, there is no government guarantee for cryptocurrency exchanges.
"I think that's one of the things that a lot of consumers don't understand, that the cryptocurrency that is held on the exchange is not theirs in the same way. They don't have direct control over it," said Aaron of RMIT Blockchain Innovation Hub. Lane.
A Senate investigation recommended changes to tax laws, regulatory and licensing regimes to encourage crypto and digital companies to establish themselves in Australia.
The global leader in digital transformation practice at Norton Rose Fulbright, Nick Abrahams, said it was critical that the government act quickly to regulate exchanges and protect Australians.
"Because the digital currency exchange space is largely unregulated, it is difficult for people to assess which exchanges are trustworthy," Abrahams said.
He said the only way to be sure his crypto was safe was to take it off the exchange and put it in a "cold wallet."
"A cold wallet is a small piece of hardware [that] you are not connected to the internet, [such as] a USB drive. Of course, the problem is that you can lose your cold wallet or the password to access your cold wallet, "he said.
Bitcoin slid 8.3 percent to $ 49,166, after hitting a low of $ 41,967 over the weekend, as profit-taking and macroeconomic concerns sparked sales worth nearly $ 1 billion in cryptocurrencies.
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