Best Australian Bitcoin exchange
Australian-founded bitcoin exchange Igot appears on the verge of collapse, with dozens of customers and clients claiming to be owed hundreds of thousands of dollars.
- Customers say they bought Bitcoin through Igot but never received them or a refund
- A former Igot advisor claims the company was insolvent in 2014
- The company's owner says the money will be returned to investors
The company, which buys and sells bitcoins on behalf of customers, has for months been unable to completely deliver on those bitcoins or refund their money.
Its owner Rick Day admitted to the ABC that he was struggling to pay customers.
"I am well aware that customers are affected and customers are really unhappy with this but I would like to show each and every one that we have not lost their money. We have not run away with anything and we will return the money, " Mr Day told the ABC.
That, according to bitcoin investors, is little comfort.
Egyptian-born Akram Bekzada invested with Igot in 2014.
He has been trying to withdraw $13, 000 worth of bitcoins since October last year.
"I think Igot are not being transparent. They are not really speaking up about what is the issue that's holding our money back, " he said.
"A lot of times they give reasons that don't stack up. A lot of times they say we have a problem with cash flow and then they say we cannot transfer bitcoins or we cannot cancel the transaction and transfer bitcoin."
Perth millionaire Zhenya Tsvetnenko's company Digital CC is owed 0, 000. Digital CC is taking action in the WA Supreme Court to windup 13th Pty Ltd — the business entity of Igot.
Mr Day dismissed the court action as "merely a commercial dispute".
"Our lawyers are working with theirs to have it resolved. I'm confident it will be resolved, " he said.
Igot is an international bitcoin exchange which claims to have several offices around the world.
It was founded in 2013, with Rick Day moving to New York shortly afterwards to work on the business with American co-founder Patrick Manasse.
Mr Day told the ABC that Igot has been doing "really well" since it was founded in 2013. He said it had only been the last few months where the company had struggled.
Bitcoin essentially is internet money, and a bitcoin exchange works in a similar way to a foreign currency exchange.
A person makes a bank deposit to the exchange in a supported currency to buy bitcoins. You use these balances to trade in bitcoins with other users of the exchange, and then you are meant to be able withdraw that money.
Transfers are almost instant, with far fewer fees, and the risk is minimal unless the actual exchange itself commits a fraud, becomes insolvent or withholds the money.
Igot 'was insolvent' a few years ago: former advisor
American entrepreneur Jesse Chenard, who worked with Igot as an advisor in 2014, was excited by the prospect of working in the emerging space of bitcoin.
In a media release picked up by the Australian media in June 2014, Mr Day trumpeted that they had "managed to secure prominent US entrepreneur" Mr Chenard as both a major investor and company advisor.
But Mr Chenard told the ABC a different a story. Before he invested any money, he looked into Igot's finances and found things were not quite right.