SA-based crypto exchange iCE3x posted an announcement on Tuesday that it had suspended all trading and deposits on the platform after discovering “discrepancies in the balances pertaining to bitcoin and litecoin.”
An update posted on the website on Wednesday says the company is processing withdrawal requests on cryptocurrencies, with the exception of bitcoin and litecoin.
The news was received with some alarm by the crypto community, though iCE3x is a relatively small player in the crypto space, representing just a few percent of the total daily volumes of cryptos traded in SA.
“This is not good news for the industry,” says one crypto executive who asked not to be named. “We take no joy in seeing a competitor taking themselves down.”
iCE3x was founded in 2013 and is one of the oldest crypto exchanges in SA; it is reckoned to have roughly 80 000 customers, though a much smaller percentage of these would be active traders.
Others in the industry say the suspension of trading at iCE3x does little to boost confidence in a crypto sector that is often viewed with suspicion due to lack of regulation, and which is working to build public trust.
The statement posted by iCE3x on Tuesday provides little insight into the reasons for the account discrepancies, other than to say: “After consultation and deliberation with our partner Merkeleon.com and their subsidiary Coinspaid.com, we have not been able to reach a satisfactory conclusion.
“On the advice of our legal & auditing team, we have suspended all Deposits & Trading. Furthermore, we have suspended BTC (bitcoin) and LTC (litecoin) withdrawals with immediate effect, pending the outcome of a full investigation and reconciliation. This is being done for the protection of all clients.”
Merkeleon is an Austrian-based company providing trading platform and other technical software to crypto exchanges. CoinsPaid is a crypto payments processor.
Moneyweb reached out to iCE3x CEO Gareth Grobler for comment, but had not received a reply at the time of publication. The story will be updated when and if we receive a reply.
According to Globalcrypto.tv, Grobler is quoted as saying that “he won’t run to Brazil” – a nod to MTI’s CEO Johann Steynberg who is believed to have fled to Brazil in December last year with billions of rands worth of bitcoin owing to tens of thousands of investors around the world.
Grobler is also reportedly a managing partner at Merkeleon.com, according to Blocknewsafrica.com, which suggests a possible dispute with his partners over the reported discrepancies at iCE3x.
Here is the announcement released on Tuesday:
It has come to our attention that there are discrepancies in the balances pertaining to Bitcoin and Litecoin we hold on the platform. After consultation and deliberation with our partner Merkeleon.com and their subsidiary Coinspaid.com, we have not been able to reach a satisfactory conclusion. On the advice of our legal & auditing team, we have suspended all Deposits & Trading. Furthermore, we have suspended BTC (bitcoin) and LTC (litecoin) withdrawals with immediate effect, pending the outcome of a full investigation and reconciliation. This is being done for the protection of all clients.
Currently, clients who hold any other currency (excluding Bitcoin & Litecoin) on the platform will be still able to withdraw their funds.
We urge you to do so as soon as possible.
Should the domain/email/service desk become unavailable as a result of 3rd party actions, we will engage via the status update page.
We apologize for the inconvenience caused and will update you with progress throughout.
Internet Currency Evolution Cubed (PTY) Ltd
And the update released on Wednesday:
The email system is currently working again and withdrawals (except BTC and LTC) are being processed.
As always we can still be reached via help.ice3.com or email us email@example.com
Thank you for your support and patience.
The iCE3 Service Desk Team.