A Vancouver-based cryptocurrency platform director faces severe consequences after admitting to fraud, resulting in a $1 million settlement and a permanent ban from the B.C. investment market. Michael Ongun Gokturk, a B.C. resident, was the public face of the now-dissolved Einstein Capital Partners Ltd., Einstein Exchange Inc., and Einstein Law Corporation, collectively known as the Einstein Corporations. These companies operated a crypto trading platform marketed as a safe and secure method for buying, selling, and storing digital assets.
Between September 2017 and November 2019, the Einstein Corporations accepted customer deposits and transferred those funds into various corporate bank accounts and wallets on third-party trading platforms. According to the BCSC, customer assets were also used to fund the platform's operations and pay withdrawals to other customers. This practice was deemed fraudulent as it contradicted the promised 'safe and secure' method of cryptocurrency trading.
In addition to the settlement, Gokturk has been permanently banned from participating in B.C.'s investment market, prohibiting him from acting as a director or officer of a company, serving as a registrant or promoter, or working in a management or consultative role related to securities or derivatives markets. The BCSC noted that Gokturk had no prior history of securities misconduct and did not misappropriate client funds, engage in speculative trading with customer assets, or personally profit from the scheme. He also contributed approximately $1 million of his own funds to support the platform and return some money to users.
The BCSC's actions were prompted by the discovery that the platform held less than $45,000 in cash and cryptocurrency, while customer liabilities exceeded US$18 million. The Einstein Corporations were dissolved in 2020 with no remaining assets. The BCSC strongly advises Canadians to use only registered platforms for buying or selling crypto assets, emphasizing the significant risks associated with non-compliant platforms, where investors' assets may not be adequately safeguarded.
