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Globix Liquidators Compel Crypto Exchanges to Reveal Customer Information

2 mins
Updated by Geraint Price
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In Brief

  • A Gibraltar court has frozen assets of crypto trading platform Globix.
  • Lawyers have demanded the identities of Kraken, Bitstamp, and wallet holders with links to Globix.
  • Valereum and Binance have not announced plans to exit the region despite the Globix regulation.
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Liquidators for Gibraltar-based Globix are demanding the crypto exchange freeze digital assets and reveal the identity of certain clients.

In search of $43 million, bankruptcy lawyers secured a court order on Tuesday to order, Bitstamp, and Kraken to reveal the owners of wallets with links to Globix.

Will Globix Liquidation Threaten Gibraltar’s Crypto Reputation?

The platform’s owner Damian Carreras shut the trading venue’s doors in June 2022. Its business model, which allowed investors to pick attractive tokens through automated trading, fell through during the crypto winter. Carreras later put the firm into liquidation after struggling to pay investors. 

According to Carreras, the exchange had been a victim of cybercrime. A person close to the matter said most of the missing funds were held in Tether.

Courts also prevented Binance, the world’s largest exchange by trading volume, from moving funds from Globix wallets. It moved $18 million from May 2021 to September 2022 and claimed it was legally compliant.

The liquidation has called into question Gibraltar’s crypto regulation and reputation as a promising crypto hub. The British territory ratified the regulation in 2018. Earlier this year, it added market manipulation and integrity rules to its rules, called the Distributed Ledger Framework.

According to its Digital and Financial Services Minister Albert Isola, the crypto market must operate in a “fair, orderly, and efficient manner,” and win the trust regulated industries enjoy.

The Financial Action Task Force placed the island on its gray list last year for regulatory gaps that permit money laundering and terrorist financing to slip through. 

Big Crypto Firms Remain Committed to Region For Now

British entrepreneur Richard O’Dell Poulden’s firm Valereum announced plans to buy a majority stake in the Gibraltar stock exchange last year, citing the island’s first-mover advantage regarding crypto regulation. The acquisition allows traders to buy stocks and other conventional financial products using crypto. The purchase received approval from the Gibraltar Financial Services Commission in Oct. 2022.

On April 21, 2023, Poulden confirmed Valereum sold Bitcoin mining assets to “focus completely” on the exchange acquisition and the launch of its NFT program. At press time, the firm hadn’t indicated whether the Globix liquidation would affect those plans.

Binance, which last year advertised four roles in Gibraltar, still employs Keiran Reyes as managing director for Binance Exchange (GIB) Limited. As of March 30, the company was advertising job positions in compliance, suggesting it plans to continue operating in the region.

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In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.

David Thomas
David Thomas, a seasoned electronic engineer with nine years of expertise, has built a distinguished career by combining his passion for writing with an in-depth understanding of...