CoinTrader/NewNote Shuts Down

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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.

This exchange or platform is based in Canada, or the incident targeted people primarily in Canada.

About CoinTrader.net

Cointrader.net was a Canadian bitcoin exchange platform 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. 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. The website provided a snapshot of the bitcoin market, displaying price trends and order book information. It also offers developer resources and funding options for users. Additionally, Cointrader.net provided access to FAQs and contact information for further inquiries, along with details on fees and legal policies.

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. 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.

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

The team behind Cointrader.net comprises individuals with diverse expertise and backgrounds. Paul Szczesny, the founder, brings technical and economic prowess honed over a decade as a software engineer and involvement with Fortune 500 companies. Jackson Warren contributes extensive domain knowledge in the Bitcoin industry and has established robust connections with entrepreneurs and businesses locally and internationally. 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.

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 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.

Key Event Timeline - CoinTrader/NewNote Shuts Down

Date	Event	Description
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.

Total Amount Lost

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

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.”

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.