DX.Exchange, an Israeli crypto platform that halted operations in November less than a year after launching, may have been a successor to a binary options exchange that closed last year after being raided by the FBI, according to the Times of Israel. The newspaper has seen bankruptcy filings by the exchange, which shows it was owned and operated by CX Technologies Ltd., who also owned binary options trading platform SpotOption, which was raided in January 2018 on suspicion of being part of Israel’s famous multibillion-dollar binary options scam.
— DX.Exchange (@DXdotExchange) November 3, 2019
DX.Exchange’s Strong Links to SpotOption
DX.Exchange launched in January this year in a blaze of publicity, offering tokenized shares in companies listed on the Nasdaq stock exchange. However, by November it had already halted operations, stating that, “The costs of providing the required level of security, support and technology is not economically feasible on our own.” Having not been able to find a buyer, the exchange was recently shuttered and bankruptcy sought, which has resulted in the revelation the DX.Exchange was in fact owned by CX Technologies, and had much stronger links to SpotOption than was realized.
The Times of Israel goes as far as saying that DX.Exchange was nothing more than a “successor company” of SpotOption, adding that the bankruptcy petition, orchestrated and filed by 78 past and present CX Technologies staff, reveals that most of CX Technologies’ 55 staff were hired straight from SpotOption in January 2018 when Israel announced a ban on binary option trading, which just about put the platform out of business. CX Technologies and SpotOption were also located in the same office, while employees’ pension plans and other funds were transferred from SpotOption to the new company. SpotOption is suspected of being a “central player” in a huge Israeli binary options trading scam that led to the practice being outlawed in the country in 2018.
Crypto Winter Still Biting
DX.Exchange staff first reported non-payment of salaries toward the end of October, while several suppliers have sued the company in the last six months over unpaid invoices. It is therefore clear that the company has been in financial arrears for some time but didn’t involve staff, who have taken it into their own hands to file for bankruptcy and hopefully protect the company’s assets from seizure. DX.Exchange is far from being the first crypto trading platform to go under this year, with the likes of CoinExchange and Liqui biting the dust this year, and others such as CoinCorner and Blockfolio cutting staff in order to survive.