Australian Crypto Exchange Collapses
myCryptoWallet, Australia’s “first zero-fee cryptocurrency exchange,” has collapsed. Documents of the Australian Securities and Investment Commission (ASIC) issued last Friday reveal that the company’s owner appointed Terry van der Velde of SV Partners to liquidate the company. CEO Jaryd Tyson Koeningsmann, who won the 2017 Young Entrepreneurs Award, founded myCryptoWallet in 2017. The virtual marketplace offered customers fee-free investments in cryptocurrencies like Bitcoin, Litecoin, Ethereum, XRP, and Power Ledger. A stamp on the website claims myCryptoWallet is “Secure, Regulated and Insured.” Unfortunately, the company suffered several setbacks following technical issues and a dispute with National Australia Bank. In 2019, only two years after the company’s establishment, users started complaining that they could not move or withdraw their funds. ASIC launched an investigation shortly after and National Australia Bank briefly suspended the company’s bank accounts.
Up to 30,000 Customers Left in The Dark
myCryptoWallet’s woes with technology partners continued. Customers were still having issues accessing their investments. Many users also reported that they were unable to trade crypto. This happened in times when the market was booming. The cryptocurrency exchange’s collapse leaves up to 30,000 customers in the dark. Just how much was lost in total, remains unclear. The liquidator encourages all affected customers and parties of myCryptoWallet Pty Ltd to contact myCryptoWallet@svp.com.au as soon as possible. SV Partners is also seeking buyers for the platform’s technological infrastructure. Expressions of interest are welcome by the end of this week. SV Partners said they will file their first creditor’s report by December 17.
Second Crypto Company to Fail
MyCryptoWallet is the second Australian crypto company to go bankrupt in the last two months. In October, Blockchain Global (BGL) went into liquidation. BGL owes creditors $21 million, with cryptocurrency traders using the company’s trading platform, ACX, to try and retrieve millions more. The company shut up shop without any explanation in 2020. Investors had a glimmer of hope when news started circulating about a locked hard drive containing around $10 million in bitcoin. However, the company’s recent bankruptcy and the millions owed to creditors put an end to that. As is the case with myCryptoWallet, any remaining assets and uncollected debts are far outweighed by its secured creditors. When a company goes into liquidation, secured and preferential creditors, like banks, suppliers, and employees, are first in line.
Call to Take Crypto “Out of the Shadows”
Currently, Australian law does not see digital currency as “money.” In the past, there have been some legislative amendments to make activities involving cryptocurrencies possible, but cryptocurrencies themselves remain largely unregulated. Consumer protection is also severely lacking. Today, however, AU treasurer Josh Frydenberg announced a complete overhaul of Australia’s payment system. “We’re taking this area [cryptocurrency] out of the shadows and into a considered regulatory framework,” explained Frydenberg. Australia is also exploring the idea of a central bank digital currency. A first set of recommendations will follow mid-2022. As of November of this year, Australia’s largest bank, the Commonwealth Bank of Australia, has allowed its customers to buy, sell, and hold cryptocurrencies. The bank also holds a small stake in the New York-headquartered cryptocurrency exchange Gemini. “We see risks in participating, but we see bigger risks in not participating,” said Commonwealth CEO Matt Comyn.
