CoinTrader/NewNote Shuts Down: Difference between revisions

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(COMPLETE Another 30 minutes. About section information spread around. Integrated information from the internet archive. Integrated information from CCN into timeline.)
(Another 30 minutes. Added more information and articles on lawsuits and initial acquisition. Updating and working on the article further.)
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{{Case Study Under Construction}}{{Unattributed Sources}}[[File:Cointrader.jpg|thumb|CoinTrader Logo/Homepage]]The details seem vague in this case. The company failed to complete an annual report for 2015. When it shut down in 2016, "an internal audit showed “a deficiency of bitcoin" in company wallets" which suggests improper storage and security practices. As of 2017, official statement was that NewNote owed nothing to creditors because the issue was with CoinTrader. Nobody knows the exact amount lost, however the company was purchased by NewNote for $1.5m.
{{Case Study Under Construction}}{{Unattributed Sources}}[[File:Cointrader.jpg|thumb|CoinTrader Logo/Homepage]]CoinTrader.net was a Canadian exchange platform. The company failed to complete an annual report for 2015. When it shut down in 2016, "an internal audit showed “a deficiency of bitcoin" in company wallets" which suggests improper storage and security practices. As of 2017, official statement was that NewNote owed nothing to creditors because the issue was with CoinTrader. Nobody knows the exact amount lost, however the company was purchased by NewNote for $1.5m.


This exchange or platform is based in Canada, or the incident targeted people primarily in Canada.<ref name="ccn-30" /><ref name="newsdotbitcoin-31" /><ref name="webfilesthecse-32" /><ref name="coindesk-33" /><ref name="reddit-34" /><ref name="reddit-35" /><ref name="bitcointalk-36" /><ref name="financemagnates-37" /><ref name="gettyimages-38" /><ref name="bloomberg-39" /><ref name="airbitz-40" /><ref name="kitco-41" /><ref name="proactiveinvestors-42" /><ref name="pressreader-43" />
This exchange or platform is based in Canada, or the incident targeted people primarily in Canada.<ref name="ccn-30" /><ref name="newsdotbitcoin-31" /><ref name="webfilesthecse-32" /><ref name="coindesk-33" /><ref name="reddit-34" /><ref name="reddit-35" /><ref name="bitcointalk-36" /><ref name="financemagnates-37" /><ref name="gettyimages-38" /><ref name="bloomberg-39" /><ref name="airbitz-40" />


== About CoinTrader.net ==
== About CoinTrader.net ==
Line 9: Line 9:


The team behind Cointrader.net comprises individuals with diverse expertise and backgrounds<ref name=":1">[https://web.archive.org/web/20150326230953/https://www.cointrader.net/the-worlds-best-bitcoin-exchange CoinTrader's About Page Archive March 26th, 2015 5:09:53 PM MDT] (Accessed Feb 29, 2024)</ref>. Paul Szczesny, the founder, brings technical and economic prowess honed over a decade as a software engineer and involvement with Fortune 500 companies<ref name=":1">[https://web.archive.org/web/20150326230953/https://www.cointrader.net/the-worlds-best-bitcoin-exchange CoinTrader's About Page Archive March 26th, 2015 5:09:53 PM MDT] (Accessed Feb 29, 2024)</ref>. Jackson Warren contributes extensive domain knowledge in the Bitcoin industry and has established robust connections with entrepreneurs and businesses locally and internationally<ref name=":1">[https://web.archive.org/web/20150326230953/https://www.cointrader.net/the-worlds-best-bitcoin-exchange CoinTrader's About Page Archive March 26th, 2015 5:09:53 PM MDT] (Accessed Feb 29, 2024)</ref>. Cheyne Mackie, a successful entrepreneur and business manager, brings logistical and managerial acumen to the company. Mitchell Demeter rounds out the team with years of experience in business management and a track record of successful ventures, adding valuable insights to Cointrader.net's operations<ref name=":1">[https://web.archive.org/web/20150326230953/https://www.cointrader.net/the-worlds-best-bitcoin-exchange CoinTrader's About Page Archive March 26th, 2015 5:09:53 PM MDT] (Accessed Feb 29, 2024)</ref>.
The team behind Cointrader.net comprises individuals with diverse expertise and backgrounds<ref name=":1">[https://web.archive.org/web/20150326230953/https://www.cointrader.net/the-worlds-best-bitcoin-exchange CoinTrader's About Page Archive March 26th, 2015 5:09:53 PM MDT] (Accessed Feb 29, 2024)</ref>. Paul Szczesny, the founder, brings technical and economic prowess honed over a decade as a software engineer and involvement with Fortune 500 companies<ref name=":1">[https://web.archive.org/web/20150326230953/https://www.cointrader.net/the-worlds-best-bitcoin-exchange CoinTrader's About Page Archive March 26th, 2015 5:09:53 PM MDT] (Accessed Feb 29, 2024)</ref>. Jackson Warren contributes extensive domain knowledge in the Bitcoin industry and has established robust connections with entrepreneurs and businesses locally and internationally<ref name=":1">[https://web.archive.org/web/20150326230953/https://www.cointrader.net/the-worlds-best-bitcoin-exchange CoinTrader's About Page Archive March 26th, 2015 5:09:53 PM MDT] (Accessed Feb 29, 2024)</ref>. Cheyne Mackie, a successful entrepreneur and business manager, brings logistical and managerial acumen to the company. Mitchell Demeter rounds out the team with years of experience in business management and a track record of successful ventures, adding valuable insights to Cointrader.net's operations<ref name=":1">[https://web.archive.org/web/20150326230953/https://www.cointrader.net/the-worlds-best-bitcoin-exchange CoinTrader's About Page Archive March 26th, 2015 5:09:53 PM MDT] (Accessed Feb 29, 2024)</ref>.
=== Acquisition By NewNote ===
In March 2015, Newnote Financial, a provider of cryptocurrency and Bitcoin-related products and services, acquired Cointrader.net, along with other assets, for C$1.5 million in cash and stock<ref name="proactiveinvestors-42" />. The acquisition makes Newnote the first publicly traded Bitcoin exchange listed on three stock exchanges<ref name="proactiveinvestors-42" />. Cointrader.net, known for its high transaction volume in Canada and its imminent expansion into the U.S. and European markets with the help of strategic partner Vogogo, processes over C$1.5 million in transactions monthly and boasts 10,000 active users<ref name="proactiveinvestors-42" />. Newnote has also acquired CoinZero, a Point-of-Sale system enabling merchants to accept Bitcoin, positioning itself as a competitor to BitPay and Coinbase<ref name="proactiveinvestors-42" />. The company plans an aggressive marketing campaign to expand Cointrader.net's user base and international presence<ref name="proactiveinvestors-42" />. Despite a flat stock performance, Newnote sees this acquisition as positioning itself as a leader in the cryptocurrency space in Canada<ref name="proactiveinvestors-42" />.
Newnote Financial Corp. has acquired Canadian-based Bitcoin exchange Cointrader.net, along with the CoinZero Point-of-Sale System and ATM machines in London and Tokyo, among other assets, for CDN $1,500,000 in cash and stock<ref name="kitco-41" />. This acquisition establishes Newnote as the world's first publicly traded Bitcoin exchange listed on three stock exchanges. Cointrader.net, one of Canada's top Bitcoin exchanges by volume, processes over CDN $1,500,000 in transactions monthly and boasts 10,000 active users<ref name="kitco-41" />. With strategic partnerships in place, Cointrader.net is poised to enter the U.S. and European markets later in the year, enabling direct bank transfers in all 50 states and many Eurozone countries<ref name="kitco-41" />. Cointrader.net provides users with 100% insured Bitcoin deposits and robust security measures. Additionally, Newnote has acquired CoinZero, enabling merchants to accept Bitcoin and offering features such as inventory tracking and Bitcoin to fiat conversion<ref name="kitco-41" />. Newnote aims to bolster Cointrader.net's user base and expand internationally through aggressive marketing and strategic partnerships. CEO Paul Dickson sees this transaction as positioning Newnote as a leader in Canada's cryptocurrency space, committed to offering innovative products and services<ref name="kitco-41" />.


== The Reality ==
== The Reality ==
Line 19: Line 24:


== What Happened ==
== What Happened ==
The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.
The Cointrader platform was breached, with the attacker making off with approximately 100 bitcoins.
{| class="wikitable"
{| class="wikitable"
|+Key Event Timeline - CoinTrader/NewNote Shuts Down
|+Key Event Timeline - CoinTrader/NewNote Shuts Down
Line 25: Line 30:
!Event
!Event
!Description
!Description
|-
|March 19th, 2015 2:00:00 AM MDT
|Kitco News Reports Acquisition
|Kitco News reports that Newnote Financial Corp. has acquired Canadian-based Bitcoin exchange Cointrader.net, along with the CoinZero Point-of-Sale System and ATM machines in London and Tokyo, among other assets, for CDN $1,500,000 in cash and stock<ref name="kitco-41" />. This acquisition establishes Newnote as the world's first publicly traded Bitcoin exchange listed on three stock exchanges. Cointrader.net, one of Canada's top Bitcoin exchanges by volume, processes over CDN $1,500,000 in transactions monthly and boasts 10,000 active users<ref name="kitco-41" />. With strategic partnerships in place, Cointrader.net is poised to enter the U.S. and European markets later in the year, enabling direct bank transfers in all 50 states and many Eurozone countries<ref name="kitco-41" />. Cointrader.net provides users with 100% insured Bitcoin deposits and robust security measures. Additionally, Newnote has acquired CoinZero, enabling merchants to accept Bitcoin and offering features such as inventory tracking and Bitcoin to fiat conversion<ref name="kitco-41" />. Newnote aims to bolster Cointrader.net's user base and expand internationally through aggressive marketing and strategic partnerships. CEO Paul Dickson sees this transaction as positioning Newnote as a leader in Canada's cryptocurrency space, committed to offering innovative products and services<ref name="kitco-41" />.
|-
|March 19th, 2015 12:19:00 PM MDT
|Acquisition Reported
|Newnote Financial, a provider of cryptocurrency and Bitcoin-related products and services, has acquired Canadian-based Bitcoin exchange Cointrader.net, along with other assets, for C$1.5 million in cash and stock<ref name="proactiveinvestors-42" />. This acquisition makes Newnote the first publicly traded Bitcoin exchange listed on three stock exchanges<ref name="proactiveinvestors-42" />. Cointrader.net, known for its high transaction volume in Canada and its imminent expansion into the U.S. and European markets with the help of strategic partner Vogogo, processes over C$1.5 million in transactions monthly and boasts 10,000 active users. Newnote has also acquired CoinZero, a Point-of-Sale system enabling merchants to accept Bitcoin, positioning itself as a competitor to BitPay and Coinbase<ref name="proactiveinvestors-42" />. The company plans an aggressive marketing campaign to expand Cointrader.net's user base and international presence<ref name="proactiveinvestors-42" />. Despite a flat stock performance, Newnote sees this acquisition as positioning itself as a leader in the cryptocurrency space in Canada<ref name="proactiveinvestors-42" />.
|-
|-
|March 1st, 2016 12:00:45 AM MST
|March 1st, 2016 12:00:45 AM MST
Line 33: Line 46:
|Homepage Still Online
|Homepage Still Online
|The last time which the CoinTrader homepage is captured as being online<ref>[https://web.archive.org/web/20160323050744/https://www.cointrader.net/ CoinTrader Homepage Archive March 22nd, 2016 11:07:44 PM MDT] (Accessed Feb 29, 2024)</ref>.
|The last time which the CoinTrader homepage is captured as being online<ref>[https://web.archive.org/web/20160323050744/https://www.cointrader.net/ CoinTrader Homepage Archive March 22nd, 2016 11:07:44 PM MDT] (Accessed Feb 29, 2024)</ref>.
|-
|March 29th, 2016
|Abrupt Shutdown
|According to PressReader, the site abruptly shut down on March 29th, 2016<ref name=":2">[https://web.archive.org/web/20220812033154/https://www.pressreader.com/canada/stockwatch-daily/20170913/281526521219543 Newnote sued by Cointrader.net customers - PressReader Archive August 11th, 2022 9:31:54 PM MDT] (Accessed Mar 12, 2024)</ref>.
|-
|-
|March 30th, 2016 8:41:34 AM MDT
|March 30th, 2016 8:41:34 AM MDT
Line 41: Line 58:
|Offline 406 Error
|Offline 406 Error
|The CoinTrader website appears to be offline. A 406 error may be returned when accessing the website<ref>[https://web.archive.org/web/20160402092901/http://www.cointrader.net/ CoinTrader Homepage 406 Error Archive April 2nd, 2016 3:29:01 AM MDT] (Accessed Feb 29, 2024)</ref>.
|The CoinTrader website appears to be offline. A 406 error may be returned when accessing the website<ref>[https://web.archive.org/web/20160402092901/http://www.cointrader.net/ CoinTrader Homepage 406 Error Archive April 2nd, 2016 3:29:01 AM MDT] (Accessed Feb 29, 2024)</ref>.
|-
|November 16th, 2016
|Trading Delisted
|The Canadian Securities Exchange delists Newnote<ref name=":2" />.
|-
|September 8th, 2017
|Notice Of Claim
|A Vancouver man named Kenneth Charles Craig files a notice of claim in the Supreme Court of British Columbia<ref name=":2" />. "The troubles, as described by Mr. Craig, go back to his purchase of 9.75 bitcoins through Cointrader.net. He says that subsequent to his purchase, Cointrader.net was acquired by Newnote. Initially, he thought his deposit was secure. He claims to have received assurances from Newnote and Mr. Dickson to that effect."
|-
|September 13th, 2017
|PressReader Article Published
|PressReader publishes an article reporting on the breach and resulting lawsuits which have happened<ref name=":2" />.
|}
|}
== Technical Details ==
Very few technical details about the breach have ever been disclosed.


== Total Amount Lost ==
== Total Amount Lost ==
"Newnote said that it suffered the loss of approximat­ely 100 bitcoins after a security breach."<ref name=":2" />
The total amount lost has been estimated at $1,500,000? USD.
The total amount lost has been estimated at $1,500,000? USD.
How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?


== Immediate Reactions ==
== Immediate Reactions ==
Line 57: Line 89:


“I had funds in the exchange and have been nagging Newnote repeatedly since it occurred. Intermittently they respond, and generally just blow me off. If you read their ToS, there's some verbiage that (if upheld) seems to indicate a 12-month "limitation period" on any claims - the deadline for which is rapidly approaching. Possible they're trying to lay low in hopes the majority of users don't do anything about it.”
“I had funds in the exchange and have been nagging Newnote repeatedly since it occurred. Intermittently they respond, and generally just blow me off. If you read their ToS, there's some verbiage that (if upheld) seems to indicate a 12-month "limitation period" on any claims - the deadline for which is rapidly approaching. Possible they're trying to lay low in hopes the majority of users don't do anything about it.”
"Newnote said that it suffered the loss of approximat­ely 100 bitcoins after a security breach. As a result, it could no longer operate the Cointrader.net site. The company claimed that it subsequent­ly reimbursed all of the users that it could verify. Mr. Kagerer and Mr. Paschenik were not among those users with verified claims, according to the company."<ref name=":2" />
"Newnote further said that the terms of use for the site specifical­ly limited its liability. Those terms stated that the site was not liable for “Monetary or other value attributed to Bitcoins,” among other things. They also stated that the site was provided “as is” and that Cointrader “disclaims any recourse against us and you hereby waive any recourse and indemnify us .. from any and all claims, demands, damages, losses, costs and expenses or [sic] any kind and nature.”"<ref name=":2" />


== Total Amount Recovered ==
== Total Amount Recovered ==
Line 95: Line 132:
<ref name="bloomberg-39">[https://www.bloomberg.com/profile/company/1250496D:CN Cointrader Exchange Inc - Bloomberg] (Feb 6, 2020)</ref>
<ref name="bloomberg-39">[https://www.bloomberg.com/profile/company/1250496D:CN Cointrader Exchange Inc - Bloomberg] (Feb 6, 2020)</ref>
<ref name="airbitz-40">[https://airbitz.co/biz/3408/cointrader-vancouver/ Cointrader (Vancouver) - AirBitz] (Feb 6, 2020)</ref>
<ref name="airbitz-40">[https://airbitz.co/biz/3408/cointrader-vancouver/ Cointrader (Vancouver) - AirBitz] (Feb 6, 2020)</ref>
<ref name="kitco-41">[https://www.kitco.com/news/2015-03-19/Newnote-Financial-Acquires-100-Interest-in-Revenue-Generating-Cointrader-net-Bitcoin-Exchange-CoinZe.html Newnote Financial Acquires 100% Interest in Revenue Generating Cointrader.net Bitcoin Exchange, CoinZero Point-of-Sale System and ATM Machines in London & Tokyo | Kitco News] (Feb 6, 2020)</ref>
<ref name="kitco-41">[https://web.archive.org/web/20220814042612/https://www.kitco.com/news/2015-03-19/Newnote-Financial-Acquires-100-Interest-in-Revenue-Generating-Cointrader-net-Bitcoin-Exchange-CoinZe.html Newnote Financial Acquires 100% Interest in Revenue Generating Cointrader.net Bitcoin Exchange, CoinZero Point-of-Sale System and ATM Machines in London & Tokyo - Kitco News Archive August 13th, 2022 10:26:12 PM MDT] (Feb 6, 2020)</ref>
<ref name="proactiveinvestors-42">[https://ca.proactiveinvestors.com/companies/news/105993/newnote-acquires-bitcoin-exchange-cointradernet-other-assets-for-c15-mln-60533.html Newnote acquires Bitcoin exchange Cointrader.net, other assets for C$1.5 mln | CNSX:NEU] (Feb 6, 2020)</ref>
<ref name="proactiveinvestors-42">[https://ca.proactiveinvestors.com/companies/news/105993/newnote-acquires-bitcoin-exchange-cointradernet-other-assets-for-c15-mln-60533.html Newnote acquires Bitcoin exchange Cointrader.net, other assets for C$1.5 mln - Proactive Investors] (Feb 6, 2020)</ref>
<ref name="pressreader-43">[https://www.pressreader.com/canada/stockwatch-daily/20170913/281526521219543 Newnote sued by CoinTrader.net customers] (Feb 6, 2020)</ref>
<ref name="pressreader-43">[https://www.pressreader.com/canada/stockwatch-daily/20170913/281526521219543 Newnote sued by CoinTrader.net customers - PressReader] (Feb 6, 2020)</ref>
</references>
</references>

Revision as of 15:10, 12 March 2024

Notice: This page is a new case study and some aspects have not been fully researched. Some sections may be incomplete or reflect inaccuracies present in initial sources. Please check the References at the bottom for further information and perform your own additional assessment. Please feel free to contribute by adding any missing information or sources you come across. If you are new here, please read General Tutorial on Wikis or Anatomy of a Case Study for help getting started.

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CoinTrader Logo/Homepage

CoinTrader.net was a Canadian exchange platform. The company failed to complete an annual report for 2015. When it shut down in 2016, "an internal audit showed “a deficiency of bitcoin" in company wallets" which suggests improper storage and security practices. As of 2017, official statement was that NewNote owed nothing to creditors because the issue was with CoinTrader. Nobody knows the exact amount lost, however the company was purchased by NewNote for $1.5m.

This exchange or platform is based in Canada, or the incident targeted people primarily in Canada.[1][2][3][4][5][6][7][8][9][10][11]

About CoinTrader.net

Cointrader.net was a Canadian bitcoin exchange platform[12] which presented themselves as the world's premier Bitcoin exchange, driven by a team of Bitcoin enthusiasts, entrepreneurs, and engineers deeply invested in the future of cryptocurrency[13]. Their homepage emphasizes easy payments through solutions like Vogogo Interac and assures customers of security through measures such as Xapo-insured cold storage and CrowdCurity[12]. The website provided a snapshot of the bitcoin market, displaying price trends and order book information[12]. It also offers developer resources and funding options for users[12]. Additionally, Cointrader.net provided access to FAQs and contact information for further inquiries, along with details on fees and legal policies[12].

Cointrader.net is a meticulously engineered Bitcoin Exchange brought to you by the team that installed the world’s first Bitcoin ATM.

Their journey into the Bitcoin industry began with local trades at small coffee shops, evolving into a brokerage in Downtown Vancouver, and culminating in the launch of the world's first Bitcoin ATM[13]. Cointrader.net aimed to bridge physical stores and ATMs worldwide with their online platform, leveraging strategic partnerships with top legal and financial professionals in Canada and securing banking partnerships in reputable jurisdictions[13].

As an online trading platform, Cointrader.net facilitates the exchange of bitcoins (BTC or XBT) for traditional currencies such as CAD and USD[13]. The company operates as a registered Canadian corporation, ensuring compliance with Canadian and international regulations[13]. Their core values revolve around security, affordability, and user-friendliness, with a commitment to providing the best possible Bitcoin exchange experience[13]. Cointrader.net encourages feedback and suggestions from users to continually improve their services, welcoming communication through their support email[13].

The team behind Cointrader.net comprises individuals with diverse expertise and backgrounds[13]. Paul Szczesny, the founder, brings technical and economic prowess honed over a decade as a software engineer and involvement with Fortune 500 companies[13]. Jackson Warren contributes extensive domain knowledge in the Bitcoin industry and has established robust connections with entrepreneurs and businesses locally and internationally[13]. Cheyne Mackie, a successful entrepreneur and business manager, brings logistical and managerial acumen to the company. Mitchell Demeter rounds out the team with years of experience in business management and a track record of successful ventures, adding valuable insights to Cointrader.net's operations[13].

Acquisition By NewNote

In March 2015, Newnote Financial, a provider of cryptocurrency and Bitcoin-related products and services, acquired Cointrader.net, along with other assets, for C$1.5 million in cash and stock[14]. The acquisition makes Newnote the first publicly traded Bitcoin exchange listed on three stock exchanges[14]. Cointrader.net, known for its high transaction volume in Canada and its imminent expansion into the U.S. and European markets with the help of strategic partner Vogogo, processes over C$1.5 million in transactions monthly and boasts 10,000 active users[14]. Newnote has also acquired CoinZero, a Point-of-Sale system enabling merchants to accept Bitcoin, positioning itself as a competitor to BitPay and Coinbase[14]. The company plans an aggressive marketing campaign to expand Cointrader.net's user base and international presence[14]. Despite a flat stock performance, Newnote sees this acquisition as positioning itself as a leader in the cryptocurrency space in Canada[14].

Newnote Financial Corp. has acquired Canadian-based Bitcoin exchange Cointrader.net, along with the CoinZero Point-of-Sale System and ATM machines in London and Tokyo, among other assets, for CDN $1,500,000 in cash and stock[15]. This acquisition establishes Newnote as the world's first publicly traded Bitcoin exchange listed on three stock exchanges. Cointrader.net, one of Canada's top Bitcoin exchanges by volume, processes over CDN $1,500,000 in transactions monthly and boasts 10,000 active users[15]. With strategic partnerships in place, Cointrader.net is poised to enter the U.S. and European markets later in the year, enabling direct bank transfers in all 50 states and many Eurozone countries[15]. Cointrader.net provides users with 100% insured Bitcoin deposits and robust security measures. Additionally, Newnote has acquired CoinZero, enabling merchants to accept Bitcoin and offering features such as inventory tracking and Bitcoin to fiat conversion[15]. Newnote aims to bolster Cointrader.net's user base and expand internationally through aggressive marketing and strategic partnerships. CEO Paul Dickson sees this transaction as positioning Newnote as a leader in Canada's cryptocurrency space, committed to offering innovative products and services[15].

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

  • When the service was actually started (if different than the "official story").
  • Who actually ran a service and their own personal history.
  • How the service was structured behind the scenes. (For example, there was no "trading bot".)
  • Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The Cointrader platform was breached, with the attacker making off with approximately 100 bitcoins.

Key Event Timeline - CoinTrader/NewNote Shuts Down
Date Event Description
March 19th, 2015 2:00:00 AM MDT Kitco News Reports Acquisition Kitco News reports that Newnote Financial Corp. has acquired Canadian-based Bitcoin exchange Cointrader.net, along with the CoinZero Point-of-Sale System and ATM machines in London and Tokyo, among other assets, for CDN $1,500,000 in cash and stock[15]. This acquisition establishes Newnote as the world's first publicly traded Bitcoin exchange listed on three stock exchanges. Cointrader.net, one of Canada's top Bitcoin exchanges by volume, processes over CDN $1,500,000 in transactions monthly and boasts 10,000 active users[15]. With strategic partnerships in place, Cointrader.net is poised to enter the U.S. and European markets later in the year, enabling direct bank transfers in all 50 states and many Eurozone countries[15]. Cointrader.net provides users with 100% insured Bitcoin deposits and robust security measures. Additionally, Newnote has acquired CoinZero, enabling merchants to accept Bitcoin and offering features such as inventory tracking and Bitcoin to fiat conversion[15]. Newnote aims to bolster Cointrader.net's user base and expand internationally through aggressive marketing and strategic partnerships. CEO Paul Dickson sees this transaction as positioning Newnote as a leader in Canada's cryptocurrency space, committed to offering innovative products and services[15].
March 19th, 2015 12:19:00 PM MDT Acquisition Reported Newnote Financial, a provider of cryptocurrency and Bitcoin-related products and services, has acquired Canadian-based Bitcoin exchange Cointrader.net, along with other assets, for C$1.5 million in cash and stock[14]. This acquisition makes Newnote the first publicly traded Bitcoin exchange listed on three stock exchanges[14]. Cointrader.net, known for its high transaction volume in Canada and its imminent expansion into the U.S. and European markets with the help of strategic partner Vogogo, processes over C$1.5 million in transactions monthly and boasts 10,000 active users. Newnote has also acquired CoinZero, a Point-of-Sale system enabling merchants to accept Bitcoin, positioning itself as a competitor to BitPay and Coinbase[14]. The company plans an aggressive marketing campaign to expand Cointrader.net's user base and international presence[14]. Despite a flat stock performance, Newnote sees this acquisition as positioning itself as a leader in the cryptocurrency space in Canada[14].
March 1st, 2016 12:00:45 AM MST Main Event Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.
March 22nd, 2016 11:07:44 PM MDT Homepage Still Online The last time which the CoinTrader homepage is captured as being online[16].
March 29th, 2016 Abrupt Shutdown According to PressReader, the site abruptly shut down on March 29th, 2016[17].
March 30th, 2016 8:41:34 AM MDT CCN Article About Shutdown Online new site CCN reports that the CoinTrader platform has shut down[1]. CoinTrader, a prominent Canadian Bitcoin exchange, has abruptly ceased its operations, leaving customers uncertain about the fate of their accounts. The exchange, known for its exchange platform, BTM ATM machines in London and Tokyo, and CoinZero point-of-sale systems, announced the closure on its website without providing any indication of a potential return. The homepage of the website now simply states that CoinTrader.net has shut down immediately, assuring customers with balances that they will be contacted via email, mail, or telephone to settle their accounts. CoinTrader's official Twitter account is also offline, with the last activity dating back to November 2015. This unexpected closure comes after CoinTrader's acquisition by publicly traded Newnote Financial in a deal worth $1.5 million in March 2015, when it was the second-largest Canadian Bitcoin exchange by volume and the first publicly traded exchange globally. However, Newnote Financial Corp's website is also inactive, with only a message teasing "something cool coming soon." The logistics of settling accounts for all customers remain uncertain, as CoinTrader has yet to provide further details or comments regarding its closure. Despite attempts to contact CoinTrader for clarification, no representative was available for comment at the time of publishing[1].
April 2nd, 2016 3:29:01 AM MDT Offline 406 Error The CoinTrader website appears to be offline. A 406 error may be returned when accessing the website[18].
November 16th, 2016 Trading Delisted The Canadian Securities Exchange delists Newnote[17].
September 8th, 2017 Notice Of Claim A Vancouver man named Kenneth Charles Craig files a notice of claim in the Supreme Court of British Columbia[17]. "The troubles, as described by Mr. Craig, go back to his purchase of 9.75 bitcoins through Cointrader.net. He says that subsequent to his purchase, Cointrader.net was acquired by Newnote. Initially, he thought his deposit was secure. He claims to have received assurances from Newnote and Mr. Dickson to that effect."
September 13th, 2017 PressReader Article Published PressReader publishes an article reporting on the breach and resulting lawsuits which have happened[17].

Technical Details

Very few technical details about the breach have ever been disclosed.

Total Amount Lost

"Newnote said that it suffered the loss of approximat­ely 100 bitcoins after a security breach."[17]

The total amount lost has been estimated at $1,500,000? USD.

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

"In addition, the Company has discontinued the Cointrader.net Bitcoin Exchange effective immediately. Rising maintenance costs and lower trading volume attributed to an increase in competitors within the Canadian market space have been factors in its closure. Users of Cointrader.net with balances remaining are being settled and accounts closed."

“I had funds in the exchange and have been nagging Newnote repeatedly since it occurred. Intermittently they respond, and generally just blow me off. If you read their ToS, there's some verbiage that (if upheld) seems to indicate a 12-month "limitation period" on any claims - the deadline for which is rapidly approaching. Possible they're trying to lay low in hopes the majority of users don't do anything about it.”


"Newnote said that it suffered the loss of approximat­ely 100 bitcoins after a security breach. As a result, it could no longer operate the Cointrader.net site. The company claimed that it subsequent­ly reimbursed all of the users that it could verify. Mr. Kagerer and Mr. Paschenik were not among those users with verified claims, according to the company."[17]

"Newnote further said that the terms of use for the site specifical­ly limited its liability. Those terms stated that the site was not liable for “Monetary or other value attributed to Bitcoins,” among other things. They also stated that the site was provided “as is” and that Cointrader “disclaims any recourse against us and you hereby waive any recourse and indemnify us .. from any and all claims, demands, damages, losses, costs and expenses or [sic] any kind and nature.”"[17]

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

General Prevention Policies

Coming soon.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.

References

  1. ↑ 1.0 1.1 1.2 Canadian Bitcoin Exchange CoinTrader Shuts Down - CCN (Feb 5, 2020)
  2. ↑ Bitcoin exchange Cointrader hacked, taken offline | Bitcoin News (Feb 5, 2020)
  3. ↑ Newnote Financial Corporate Update (Feb 5, 2020)
  4. ↑ Bitcoin Exchange Cointrader Shuts Down After Alleged Hack - CoinDesk (Feb 5, 2020)
  5. ↑ Cointrader.net hacked :( : Bitcoin (Feb 6, 2020)
  6. ↑ Was Cointrader hacked? : Bitcoin (Feb 6, 2020)
  7. ↑ Bitcoin Exchange Cointrader Shuts Down After Alleged Hack (Feb 6, 2020)
  8. ↑ Canadian Bitcoin Exchange CoinTrader to Go Public in $1.18 Million Deal with Newnote Financial | Finance Magnates (Feb 6, 2020)
  9. ↑ Attendees visit the Cointrader Exchange Inc. booth during the... News Photo - Getty Images (Feb 6, 2020)
  10. ↑ Cointrader Exchange Inc - Bloomberg (Feb 6, 2020)
  11. ↑ Cointrader (Vancouver) - AirBitz (Feb 6, 2020)
  12. ↑ 12.0 12.1 12.2 12.3 12.4 CoinTrader Homepage Archive January 27th, 2015 2:07:29 AM MST (Accessed Feb 29, 2024)
  13. ↑ 13.00 13.01 13.02 13.03 13.04 13.05 13.06 13.07 13.08 13.09 13.10 CoinTrader's About Page Archive March 26th, 2015 5:09:53 PM MDT (Accessed Feb 29, 2024)
  14. ↑ 14.00 14.01 14.02 14.03 14.04 14.05 14.06 14.07 14.08 14.09 14.10 Newnote acquires Bitcoin exchange Cointrader.net, other assets for C$1.5 mln - Proactive Investors (Feb 6, 2020)
  15. ↑ 15.0 15.1 15.2 15.3 15.4 15.5 15.6 15.7 15.8 15.9 Newnote Financial Acquires 100% Interest in Revenue Generating Cointrader.net Bitcoin Exchange, CoinZero Point-of-Sale System and ATM Machines in London & Tokyo - Kitco News Archive August 13th, 2022 10:26:12 PM MDT (Feb 6, 2020)
  16. ↑ CoinTrader Homepage Archive March 22nd, 2016 11:07:44 PM MDT (Accessed Feb 29, 2024)
  17. ↑ 17.0 17.1 17.2 17.3 17.4 17.5 17.6 Newnote sued by Cointrader.net customers - PressReader Archive August 11th, 2022 9:31:54 PM MDT (Accessed Mar 12, 2024)
  18. ↑ CoinTrader Homepage 406 Error Archive April 2nd, 2016 3:29:01 AM MDT (Accessed Feb 29, 2024)

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