UK court shuts down crypto platform GPay over fraudulent practices
GPay lured in clients and investors with fake celebrity endorsements and the promise of an easy-to-use platform
The end of June saw the UK Government’s Insolvency Service post a notice explaining that GPay — also known as XtraderFX and formerly identified as Cryptopoint — had been closed down after “losing” £1.5 million ($1.8m) of investor funds.
The investigation found that at least 108 clients lost their money, even when they went for insurance that was supposed to cover the cost of financial losses. When these traders made an attempt to withdraw any funds they had invested into the platform, they hit several barriers throughout the process.
Traders were hindered by requests for information and further verification, such as ID and utility document requirements, even though these checks were not required to make deposits.
The XtraderFX website has since been shut down. However, cached versions of the URLs still maintain the company’s promises of an easy crypto trading platform and portfolio, as well as a platform for mining on the side.
The platform guaranteed that it would provide an avenue for crypto enthusiasts without any prior experience in trades to invest, as they were backed by experienced traders and computational tools to make the activity easier.
GPay reached out to individuals in the UK and elsewhere through online advertising campaigns and multiple social media channels. UK regulators explained that customers were encouraged to use the online trading platform with advertisements that falsely claimed it was supported or endorsed by entrepreneurs that had previously starred in TV shows, such as Peter Jones from Dragon’s Den.
The company, which was reviewed on Trustpilot, received complaints of deposits made without their clients’ knowledge, closed accounts without prior warning and even harassment through phone calls that pushed for more investments.
Crypto scams, fake initial coin offerings (ICOs) and exit scams have been a rampant problem within the crypto industry. Investors are often trading at their own risk unless the crypto exchange is registered under government agencies, such as the US Securities and Exchange Commission.
Martin Lewis, the founder of MoneySavingExpert and victim of the fraudulent use of his image to promote this particular scheme, previously took Facebook to court over the abuse of his name and image scattered across thousands of false adverts.
The case was settled after the networking site promised to launch a dedicated report tool for scam ads and to donate £3 million to a Citizens Advice project that helped tackle complaints related to scams.