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The Australian government is working on a way to regulate the crypto market, but there’s no shortage of scams in this space that continue to lose investors.
The “why crypto market is down today 2021” is a question that has been asked multiple times recently. The two Australian exchanges that have collapsed with $50 million lost, are the Bitconnect and Centra.
Following the voluntary administration of Blockchain Global (BG), the parent company of crypto exchange ACX, legal experts have raised concerns.
Similarly, the collapse of Mycryptowallet last week prompted fresh demands for tougher regulation of the crypto industry as a whole.
According to the Guardian, the two instances resulted in the loss of $50 million in cryptocurrencies, with ACX responsible for the great bulk of the assets.
Cryptocurrency companies in Australia have been hammered.
Following a disagreement between former business partners Sam Lee, Allan Guo, and Jin Chen, the Victoria Supreme Court ordered the freezing of 117 Bitcoin owned by BG and ACX on September 13.
ACX, situated in Melbourne, ceased operations in early 2020, resulting in the freezing of user accounts. Around 200 investors came forward to claim a $7 million (AUS$10 million) loss.
In response, Blockchain Australia issued a lifetime ban, while AUSTRAC terminated the platform’s digital currency registration.
Since then, forensic accountants have gone over the firm’s financial records and discovered a black hole worth more than $50 million, rather than the $7 million originally estimated.
Andrew Yeo, a partner at financial services firm Pitcher Partners, said he had no idea what happened to hundreds of ACX clients’ money. But he’s dead set on finding out.
Pitcher Partners was recruited to manage the administration of BG two months ago; nevertheless, Yeo confesses he isn’t a crypto expert.
“It’s evident that we have a variety of investigative options, and choose which ones to pursue first is not an easy process.”
Similarly, the crypto exchange Mycryptowallet folded last week, owing hundreds of thousands of dollars.
Users have complained about being unable to withdraw cash and losing balances earlier this year, according to Australian news sites. The worries have been dubbed a “negative shill campaign” by Mycryptowallet.
Insolvency company SV Partners has now asked all impacted consumers to come forward as liquidation procedures commence.
Cryptocurrency is being criticized.
The aftermath of both failures has spurred politicians to speak out against the crypto industry, citing the absence of assurances and investor safeguards when dealing with digital money.
According to Aaron Lane, an advisor and researcher at the RMIT Blockchain Innovation Hub, money kept on exchanges pose a considerable third-party risk.
“I believe it’s one of the things that a lot of customers don’t realize: the cryptocurrency housed on the exchange isn’t theirs in the same manner.” They have no direct authority over it.”
Furthermore, since the crypto area is not regulated to the same degree as the banking sector, customers are kept in the dark about whether exchanges are reliable and have safeguards in place to secure their cash.
The Australian Treasurer, Josh Frydenberg, said that the government is working on implementing a crypto exchange licensing structure. By the middle of next year, this should be completed.
Posted in: Exchanges, Australia
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The “crypto crash” is a term that was coined to describe the market crash of cryptocurrency. The two Australian exchanges, which are responsible for $50 million worth of crypto were forced to close due to the lack of support and trust.
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