Investigation into bitcoin trading platform launched

The sudden shutdown of cryptocurrency trading platform BitMarket.pl on Wednesday and related losses of customers is to be investigated by prosecutors.

The investigation by a cybercrime team at the Olsztyn District Prosecutor’s Office in Northern Poland will examine whether the platform's management company, London-based Kvadratco Services Limited was “misleading clients with regard to the intention of signed agreements on the purchase of cryptocurrencies and the transfer of this money to their management”.

A message appeared on the webpage of the platform on July 8, informing customers that “due to a loss of liquidity, BitMarket.pl had been forced to cease trading. We will inform you of further steps.”

BitMarket.pl was a very popular trading site with Polish bitcoin traders, who may have irretrievably lost over 23,000 bitcoins worth over PLN 100 mln (EUR 23.5 mln) from trading accounts on the online brokerage, according to District prosecutor Cezary Fiertek.

Many online market analysts then put out a warning to investors about keeping their assets in the online accounts on such platforms after the completion of a transaction rather than managing them in offline portfolios.

However, some of those who lost money reported the loss of coins which were involved in ongoing transactions as the platform was taking orders right up until it closed down.

If found guilty, BitMarket.pl’s management may face up to 10 years behind bars, but the question arises as to how the users of the platform can be compensated for their loss and whether any of the coins can be traced.

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