€29 Million: UK-Based Crypto Platform Allegedly Defrauded By ‘Colluding’ Customers

Dooga Ltd., a UK-based company which traded under the registered trademark “Cubits”, has reported that it was “the victim of a serious criminal act” – which allegedly involves its customers “colluding with fraudsters” to steal millions of dollars in bitcoin (BTC).

According to a notice on the official Cubits website, the “criminal act” took place in February 2018 and “involved the accounts of three” of the company’s clients. Bitcoins that had a market value “at that time” of about €29 million were “properly delivered and subsequently withdrawn, with the customers” working secretly with “fraudsters”, Dooga Ltd. has claimed.

Dooga Ltd.’s blog post also mentioned that Cubits “never received the equivalent in fiat” from the payment processor that had facilitated the multi-million dollar transaction. As soon as Cubits’ management “became aware of the act”, it reportedly informed the appropriate authorities in the UK, Malta, China, and Germany. Additionally, Dooga Ltd. has filed “several criminal complaints.”

“Difficult Decision To Place Company Into Administration”

Founded in 2014, Dooga had been operating a platform to “buy, sell, and accept” cryptoassets, however, as mentioned, the company has allegedly become a victim of a criminal act, “perpetrated from outside the organization.” The crypto firm further noted that its business was “critically impacted” and the exploitative activity “finally led to the difficult decision to place the company into Administration.”

Steve Parker and Trevor Binyon, who are both partners at Opus Restructuring & Insolvency LLP (a subsidiary of Opus Business Services Group), were assigned as “Joint Administrators” to Dooga/Cubits’ case on December 10th.

The notice from Dooga Ltd. also stated that the “decision secures the current position whilst the Administrators seek offers for the business and its assets.” As part of their role, the Administrators will “work with those who are owed money” by Dooga Ltd. and be responsible for “collecting monies that are owed.” It’s expected that the Administrators will try to “recover as much as possible of the funds owed to the Company.”

Two Garnishee Orders Against Malta-based Payment Processor

Before appointing the Administrators, Dooga claims to have made “every possible effort to recover” the large amount of cryptocurrency. The firm has reportedly been working since February of this year, and has been “unsuccessful up until now” in its efforts to recover lost funds. Moreover, Dooga “has filed two garnishee orders against the Malta registered payment processor which owes Dooga approx. €35 million.”

The trading platform has also started “arbitration proceedings, with the largest share coming from the aforementioned transactions of the three account holders.” Commenting on the matter, Steve Parker said:

We have assembled a partner team from Opus with specialist expertise in technology, insolvency and forensic accounting. Our goal is to achieve the best outcome for creditors generally at the earliest possible date. Dooga’s current position is secure, investigations are proceeding and we will be writing to creditors, formally, this week.