$43M Missing in Globix Collapse, Liquidators Freeze Crypto Assets

In search of missing $43M, liquidators of Globix secured a court order to freeze digital assets and provide customer information. On April 23, 2023, the court injunction in Gibraltar ordered various crypto exchanges like Crypto.com, Kraken, and Bitstamp to give customers’ identities concerning crypto wallets associated with Globix. At the same time, the world’s leading crypto exchange is ordered to halt moving crypto assets from crypto wallets linked with Globix.

The Search for the Missing $43 Million

The insolvency lawyers are looking for the missing $43 Million, lost after Globix collapse. This asset injunction seriously undermines Gibraltar’s ambition of becoming a world-leading jurisdiction that properly monitors the business of digital assets. The British Overseas Territory successfully passed crypto regulations in 2018, making them the first jurisdiction in the world to write rules for the volatile market.

Goblix was trying to make the mark in the crypto investing arena by facilitating investors to choose automated trading strategies for selecting tokens with attractive values. But it was caught in the storm of the harsh crypto winter of 2022.

Damian Carreras, director and sole shareholder of Globix, is a Gibraltarian citizen. Interestingly, most of its investors are from the country, and some occupy influential positions in legal and political circles, with one of them sitting in the Gibraltarian parliament.

Most of its fund was held in Tether, a stablecoin pegged by the US dollar.

The injunction came into action on April 13, 2023, and states that any person knowing having prior knowledge of ill activity performed, and did not reported will be held in contempt of court. 2022 was dotted with multiple collapses and bankruptcies, and such incidents made the crypto industry fight with the reputational fallout that usually comes with such scenarios.

Globix was not licensed, raising a question mark on Gibraltar’s crypto ambitions. Also, are they able to identify and manage the risks consumers face? One anonymous person familiar with the case argued how can experience investors with considerable knowledge of financial services could invest in an unlicensed investment vehicle.

Speaking to the media, the Gibraltar Financial Service Commission argued against taking proactive measures to manage the issue. They are working with concerned authorities towards consumer protection and, in turn, saving the image of Gibraltar.

Goblix collapsed in June 2022, when the crisis of confidence gripped the market at the start of crypto winter. Bitcoin almost lost half its value, and many crypto entities left the picture. At the same time, Globix investors were locked out of the system, and the country was placed on the gray list by the Financial Action Task Force (FATF).

FATF is an intergovernmental organization leading the global fight against financial crimes. The countries in the list are categorized as having issued in their operations to fight money laundering and terror funding.

According to the Government of Gibraltar, this case emphasizes the need to license and supervise crypto firms to provide sound consumer protection. As such is the objective of the nation’s crypto regulations.

While speaking to the media, Carreras said that FT Globix fell victim to cybercrime and fund theft, which they tried to recover. Submission made at the court claims a Globix funding wallet was active till September 2022.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing