MyCryptoWallet Collapses and Leaves Bitcoin Traders Stranded: Report

MyCryptoWallet Collapses and Leaves Bitcoin Traders Stranded: Report
This illustration photo shows a physical banknote and coin imitations of bitcoin. (Photo: Ozan Kose / AFP, Getty Images)

MyCryptoWallet, an Australia-based cryptocurrency exchange that allowed users to buy and sell coins like ether and bitcoin, has collapsed and left users without access to funds, according to multiple reports. The company called in a firm called SV Partners on Friday to liquidate what remains of the exchange and deal with creditors, according to the Australian Financial Review.

MyCryptoWallet, founded by 28-year-old Jaryd Koenigsmann in 2017, previously claimed to have 20,000 users, though it’s not clear how many people may have actively had money in the exchange when it collapsed. It’s also unclear how much money disappeared for users and whether they’ll ever see that money again. But let’s just say it’s not looking good.

The cryptocurrency industry in Australia is largely unregulated, much like in the United States. But if you take a look at MyCryptoWallet’s website, there’s a curious claim made in the bottom right-hand corner. A little emblem appears that reads, “Secure. Regulated. Insured.” Those claims all appear to be lies, as best as Gizmodo can tell.

Screenshot: MyCryptoWallet.com Screenshot: MyCryptoWallet.com

SV Partners plans to issues its first credit report on the company on December 17, which should provide more information about what’s under the hood, according to Australia’s ABC News. Many politicians in Australia have called for the crypto industry to be regulated, but that regulation would come too late for users of MyCryptoWallet.

There were several signs that MyCryptoWallet was not doing well over the past year. Users were often unable to access their bitcoin, according to a report from the Sydney Morning Herald in April, though it should be noted that’s an extremely common complaint in the world of crypto. Consumers who use Binance, for example, have filed complaints with the Securities and Exchange Commission several times alleging that Binance allowed them to deposit money, but not take any out.

From the Sydney Morning Herald back in April:

Toni Walker, a 63-year-old investor who bought $US1500 ($2,129) worth of cryptocurrency on MyCryptoWallet over the last four years, said she wanted to withdraw her funds earlier this year when they had doubled but was unable to access the exchange.

“I would welcome the chance to get my funds back, but I don’t have a good feeling about it,” she said.

MyCryptoWallet did not respond to a request for comment early Tuesday.

The price of bitcoin has plunged in recent days, with the price dipping to roughly $US45,000 ($63,855) over the weekend. The price has recovered a bit early Tuesday, hovering around $US51,000 ($72,369) but still quite a ways from a recent all-time high of over $US68,000 ($96,492) on November 10.