London Block Exchange Forced to Liquidate After a Year of Rumours

Dragon Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term Ltd., which was formerly known as the London Block Exchange (LBX), shut down its operations late last week with an announcement that it is being liquidated after a “winding up order” (a court order that forces an insolvent company into obligatory liquidation) that was placed against the company on January 31st.

The announcement, which has entirely taken the place of LBX’s main site, said that Paul Cooper and Paul Appleton of David Rubin & Partners were appointed as Joint Liquidators on February 4th by the UK’s Secretary of State.

“The Joint Liquidators and their team are working toward resolving customers’ concerns, including the recovery of any sums owed, as a matter of priority,” the announcement said, providing contact details for the liquidators. “We will endeavour to provide a further update as soon as possible.”

Dragon Payments Limited - in Compulsory Liquidation (formerly known as London Block Exchange Limited)

Company number - 10966096 pic.twitter.com/zNZIxDsATu

— LBX (@LBXSocial) February 7, 2020

A previous winding up order was submitted in April 2019

LBX/Dragon Payments’ shut down comes just a few months more than two years after the company was founded in 2017. According to Business Insider, the exchange raised over £2 million (roughly $2.6 million) from investors prior to its launch. The exchange originally planned to issue prepaid cards that would have allowed users to shop with Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term. However, in 2018, the company reportedly re-focused its efforts toward becoming a mobile exchange for UK customers.

Signs that something may have been amiss at LBX seem to have appeared as early as January of 2019 when two of the company’s three directors (John William Mcleod and Adam Lee Bryant) left the firm.

Then, in March of 2019, law firm Squire Patton Boggs filed a winding-up petition against the exchange over a bill worth £9,900 (around $12,800). After the law firm drafted the exchange’s terms and conditions and provided some other services, LBX reportedly did not pay up on time, which caused the firm to raise the amount it was owed.

Benjamin Dives, LBX’s then-CEO, said to CoinDesk that “the bill didn’t come to my attention until it was very late,” and that it was paid “within 24 hours of the [winding up] petition being issued.” At the time, Dives said that “we’re getting calls from people who think we’re going out of business, but we’re not going into liquidation,” but he was sure that the court would decide in LBX’s favor.

Users complained of difficulties with withdrawing

The same month, podcast host Peter McCormack also claimed in a since-deleted Tweet that LBX was “insolvent”: according to McCormack, its staff had not been paid since December of 2018.

London Block Exchange CEO has been forced to wind the business down. Website is down, customers reaching out.

Another exchange bites the dust losing customer funds.

Original story and allegations:https://t.co/HjlqHn07j3 pic.twitter.com/5wuKU7EPrd

— Peter McLasso (@PeterMcCormack) February 5, 2020

Around the same time, users began posting online that they were unable to withdraw their assets from the exchange. However, LBX appears to have denied that anything serious was happening.

In response to a user’s Reddit post 11 months ago, a representative of LBX wrote that “the exchange is currently undergoing a period of maintenance and as a result, a few features...have been taken offline.”

“This period of instability has lasted much longer than we had expected and consequently, the service that we're currently providing is falling short of our, and our customer's, expectations,” the representative wrote.

Finance Magnates reached out to Benjamin Dives, who did not respond immediately for comment. Comments will be added as they are received.