On June 30th, 2020, the UK government gave notice on the closure of GPay. According to the notice from the government’s Insolvency Service, the crypto company had been operating as XTraderFX and had cost investors crypto worth $1.8 million.
The UK government Solvency Service caught up with the scan platform on June 23rd before the High Court made the official ruling for its closure.
Promises of Easy Crypto Trading
XTraderFX, which was formerly known as Cryptopoint, targeted UK users through advertising in online channels. The company promised an easy cryptocurrency trading platform, in addition to a mining platform.
Users who had no experience in crypto trading would receive help from experienced traders and computational tools to help them invest in digital currencies. Many users even opted for insurance to mitigate any financial risks. They, however, fell victim to the scam as they couldn’t withdraw any of their funds on the platform due to ID and utility document requirements.
Investors complained of poor customer service on TrustPilot reviews. Some of the issues that were raised included several harassment calls using different numbers and account closure without warning.
Fake Celebrity Endorsements
One of the most significant methods that GPay used to lure in investors was through advertising on social media channels. The company used well-known and trusted faces in their marketing campaigns. They even claimed that some high-profile websites had endorsed the service, which was not the case.
Most of the users who fell prey to GPay’s scheme admitted that a Dragon Den advertisement on Facebook had convinced them to join the platform.
Martin Lewis, the founder of MoneySavingExpert, said GPay’s closure was good riddance. The financial expert has previously battled Facebook in court for the use of his images in false advertisement. In a bid to settle the case, Facebook had to donate £3 million to help deal with scam-related complaints. The social media platform also promised to launch a scam ads report tool.
GPay’s Scam Serves as Warning to Crypto Traders
Cryptocurrency scams have been increasing by the day in the crypto space. This is one of the reasons why regulators across the globe are trying to crack down on exchanges and other platforms that may be using digital currencies for fraudulent activities.
David Hill, a Chief Investigator for the Insolvency Service, said that they welcomed the court’s decision to wound up GPay. Commenting on the closure, he added that, “This scam should also serve as a warning to anyone who conducts trading online that they should carry out appropriate checks before they invest any money that the company is registered and regulated by the appropriate authorities.”
Crypto traders often do so at their own risk. It is, therefore, advisable that they carry out due research before committing their money to any platform.