Countinghouse, the crypto-based contract for difference (CFD) fund that seemed to have beaten the bear market by offering a 10x return for investors, might have fallen at the final hurdle and lost investors’ money following a bungled sale. The fund, which has seen withdrawals frozen since February, was supposedly sold to a European broker, but investigations by investors uncovered no knowledge of the sale by the supposed buyers, leading to panic among investors and the potential loss of the $40 million fund.
Promising Start, Terrible End
Countinghouse started trading in June 2018, and performed very well during the bear market, with the token price hitting $5 in October, representing a 10x from ICO. This was despite withdrawals being frozen in February, allegedly down to regulatory difficulties in issuing them. During this time an audit was completed by accountants, who verified existence of the funds, which satisfied investors, in addition to the fact that Countinghouse are registered with Australian Securities and Investments Commission (ASIC).
After supposedly failing to overcome the regulatory difficulties, the fund was put up for sale, with investors notified that a broker group called JFD Wealth had acquired it on November 26, followed by a welcome message on the fund’s website three days later which promised “transparency and a direct approach”. However, suspicious investors quickly did some digging and discovered that the writer of the letter didn’t exist at JFD, followed closely by a denial from JFD’s legal team that they had anything do with Countinghouse. This sent the investors into a tailspin, not helped by the absence of the team in the Telegram support group, and the token price on exchanges plummeted to below ICO prices.
Nail in the Coffin
Final confirmation that something serious was amiss came via a denial from the CEO who supposedly signed the contracts that he had ever heard of the fund, and an eventual message on the JFD website saying the same. By now fingers were firmly being pointed at the fund’s algorithm operator and sale conductor, Tim Dawson, with investors unable to tell if he had been scammed or was himself the scammer. Dawson has not been heard of since the CEO’s denial, and many have begun legal proceedings despite the absence of a cohesive narrative as to what happened.
Some information points to Dawson himself acting illegally, with others stating that the plan was too elaborate for him to be architect himself. With a dearth of missing information, investors are clinging to the fact that the $40 million might still reside with the brokers that Countinghouse used and have not yet been withdrawn. They have applied to have the funds frozen, but it could be a race against time to save them from the scammers withdrawing it.
It is tempting to say that this is another crypto scam, but the fact that Countinghouse had all the licenses an investor would look for, plus a ten-year track record in forex trading, and were trading CFDs and not cryptocurrency itself, it is a slightly different proposition. Once again however, investors have been left with huge losses, albeit with the slim chance that the authorities can help them recover some of the losses.