The Estonia-registered crypto exchange, DX.Exchange announced that the company had begun bankruptcy proceedings. The news was somewhat expected after the company closed its doors just a few weeks earlier due to a petition filed against the firm by employees awaiting payroll. Company officials say they have no money left in their bank accounts. Now, a slew of workers and business affiliates await court proceedings.
Bankruptcy Petition
The official bankruptcy petition filed on Oct. 24 alleged that the DX.Exchange owed 78 former employees payroll for the months of September and October. These employees included a variety of workers from CX Technologies Ltd., the company behind DX.Exchange. The petition sought to have the exchange dissolved by an Israeli court.
Unpaid Suppliers
Additionally, a host of suppliers have taken suit against the company. These suits run the gambit from unpaid bills to the alleged fraud. The well-known cybersecurity firm, White Hat Ltd is one of the company's claiming losses due to DX.Exchange actions. Another lawsuit lists Bee2See Dotan B.S. Solutions. This is the firm that handled DX.Exchange targeted marketing. Even the company supplying the servers never got paid – Malam Team.
Writing on the Wall – DX.Exchange
Employees and suppliers knew to take action earlier in the month after the firm closed its doors unexpectedly. At the time, DX.Exchange owner Pinhas Patarkazishvili cited the rising costs and dwindled profits the exchange had left. He told employees that he was searching for a merger or acquisition and if that he was unsuccessful, the company would permanently cease operations.
DX.Exchange
The much-hyped DX.Exchange promised to deliver an efficient trading experience on the blockchain. The company planned to trade all types of cryptocurrency including
security tokens. According to the company's documents, the exchange had agreements to list some big-name
tokenized securities such as Tesla and Apple stock.
When questioned about the security token aspect of the exchange specifically in a recent interview, DX. Exchange CEO, Daniel Skowronski explained that the company applied for an MTF (multilateral trading facility) exchange license under a different entity but never completed the requirements prior to filing for bankruptcy.
Shady Dealings
Interestingly, this story goes much deeper. Apparently, it was
reported that Limor Patarkazishvili (DX.Exchange owner's wife) was the sole owner of another firm that was raided by the FBI in 2018. The company,
SpotOption, allegedly was a major player in a large international binary options scam. When investigators delved deeper, they discovered that both companies shared staff.
At first, the DX.Exchange denied any involvement in SpotOption. Eventually, it came to light that Limor Patarkazishvili was the main shareholder in the firm. She owed 99 percent of the shares. This discovery only fueled speculation that the couple wanted to skip out on their past-due payments.
Will Employees and Affiliates Get Paid?
Skowronski publicly claimed that his company is not in “an exit scam.” Unfortunately, this was right before the company closed its doors. For now, the holidays could be bumpy for employees of the DX.Exchange as they attempt to cope with the financial losses.
