Cryptocurrency trading platform GPay closed by UK High Court

The U.K. High Court ordered GPay to be “wound up in the public interest.” The cryptocurrency trading platform was accused of scamming crypto traders by using fake endorsements by celebrities.

UK’s Insolvency Service posted an announcement on June 30 stating that GPay Ltd has been closed after “losing” £1.5 million (around $1.8 million) of investor funds, according to ZDNet. The cryptocurrency exchange was trading as XtraderFX and is formerly known as Cryptopoint.

The UK government said that 108 clients of the crypto trading platform lost their funds. GPay prevented clients from withdrawing their funds by requiring them to present various identification documents. However, the firm allowed clients to deposit even without completing the standard know-your-customer (KYC) process, according to Coindesk.

GPay also offered insurance to its clients designed to protect them from potential trading losses. However, there were complaints that the company sometimes did not pay the insurance claims.

As far as the Insolvency Service is concerned, GPay is an elaborate scam. “GPay persuaded customers to part with substantial sums of money to invest in cryptocurrency trading,” Insolvency Service’s David Hill said. “This was nothing but a scam as GPay tricked their clients to use their online platform under false pretenses.”

One method that GPay used to encourage people to use their service is by using fake celebrity endorsements through online campaigns that included posts to various social media channels. “Customers were encouraged to use GPay's online trading platform through advertisements that falsely claimed the service was supported or endorsed by entrepreneurs that starred in a prime-time TV show and a high-profile money-saving website,” UK regulators said.

For instance, GPay falsely claimed that it is backed by Martin Lewis who founded the popular finance website MoneySavingExpert. “I don’t know whether to dance a jig that these despicable scum have been shut down or cry that they managed to take so many people’s money,” Lewis said in an interview.

In May 2018, GPay was already warned for offering financial service without the authorization from the Financial Conduct Authority (FCA). The agency warned the public to be wary of dealing with the firm.

“We believe this firm has been providing financial services or products in the UK without our authorization,” FCA warned. “Find out why to be especially wary of dealing with this unauthorized firm and how to protect yourself from scammers.”

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