World Bitcoin Exchange
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World Bitcoin Exchange was a bitcoin exchange based in Australia. At the end of 2011, the exchange appears to have not had their corporate structure renewed, which was suspected to be due to not filing annual returns. On February 14th, 2012, the exchange started to experience issues with banking services through their account with the Commonwealth bank in Australia. For 9 days, the platform did not notify customers. Finally, on March 11th, the platform announced a shut down with intention to return all customer funds. However, funds in AUD remained frozen by their bank and there is no clarity as to whether those were ultimately able to be returned to customers at any point.
About World Bitcoin Exchange
World Bitcoin Exchange is an exchange platform owned and operated by an entity called High Net Worth Property Pty Ltd[1]. The service was originally launched on August 10th, 2011[1].
The site reportedly used the open source Intersango software[1][2]. The homepage of the site featured a bitcoin currency converter with both bid and ask offers on bitcoin[2]. Users were required to set up and log in with OpenID accounts in order to use the website[2].
Business Registration Information
World Bitcoin Exchange was registered to operate in Victoria[3], and the listed address was in Gold Coast, Queensland, Australia[3].
Every company in Australia is issued with a unique, nine-digit number when registered[4]. This is an Australian Company Number (ACN)[4]. The ACN listed on the homepage was ACN: 61 131 700 779[2].
Twitter Account
Trading Fees
The service charged trading fees on sales[2].
0.1% (capped at 0.0250 BTC) when buying BTC
0.6% (capped at 0.25 AUD) when selling BTC
3.0% (capped at 5.00 AUD) when depositing MtGox AUD vouchers
The Reality
The World Bitcoin Exchange had been deregistered as of December 4th, 2011[6]. Past business name of Gobble Inc.
What Happened
Due to fraudulent activity, World Bitcoin Exchange stole over 5000 BTC worth at the time in AUD. The total amount stolen was reported as 25779.49 AUD.
| Date | Event | Description |
|---|---|---|
| July 8th, 2011 12:50:05 AM MDT | Earliest Website Capture | The earliest capture of the World Bitcoin Exchange, based on the internet archive[8]. From the snapshot, it appears that the homepage currently offers auctions, where users are auctioning a single bitcoin for 0.99 USD[8]. The current price of bitcoin is quoted as $15.14 AUD[8]. |
| August 10th, 2011 | World Bitcoin Exchange Founding | The platform is originally founded[1]. |
| October 10th, 2011 12:09:00 AM MDT | Website Captured Again New Layout | The website is captured again in the internet archive, this time with an improved layout and many graphical elements[2]. The new site appears to have an order book for both buying and selling of bitcoin, as well as commissions which can be set up[2]. Users can swap back and forth between Australian Dollar (AUD) and bitcoin (BTC)[2]. |
| December 4th, 2011 | Company Deregistered | "As a note, the supposed company was de-registered in December (4th). That is actually useful as it means rather than hiding behind a limited liability company structure, the actions have taken place by Andre as an individual and he is personally liable."[11][6] Many users raise the suspicion that this was due to not filing annual returns. |
| February 14th, 2012 | Banking Issues Start Out | According to a thread posted by World Bitcoin Exchange, this is the date when their banking issues first started[12]. |
| February 23rd, 2012 3:25:35 AM MST | World Bitcoin Exchange Frozen Announcement | An announcement is posted on BitcoinTalk that the World Bitcoin Exchange has been shut down due to an issue with their "Commonwealth processing account"[12]. They plan to "leave the exchange in its 'frozen' state until we are able to re-commence operations"[12]. |
| March 6th, 2012 | Announcement Announced | A user reports hearing from Andre that he would "be announcing a statement with in the next 7 days on the site and forums"[13]. |
| March 8th, 2012 5:26:06 PM MST | Site Developer Email Response | One user reports having got a response from the site developer. They are hopeful the platform will return, but suggest that a public update would be very helpful[14]. |
| March 11th, 2012 12:18:44 PM MDT | Discussion Of Legal Action | User "sonba" reports that they are considering legal action since they haven't got any response from Andre whatsoever[15]. |
| March 11th, 2012 4:54:35 PM MDT | Platform Shutdown Announced | Clients of the exchange start to receive email messages about the shutdown of the platform[16]. While the announcement states that they will be "returning all client funds", there is no timeline provided[16]. |
| March 11th, 2012 6:42:03 PM MDT | Bitcoin Stored Offsite | BitcoinTalk user dooglus announces that the bitcoin have been stored offsite and are all accounted for in the wallet[17]. |
| March 15th, 2012 | Website Access Removed | dooglus reports that they were unable to log into the World Bitcoin Exchange web host as of this date[18]. |
| March 19th, 2012 7:27:46 PM MDT | Update Posted On Website | A user reports an update is available on the World Bitcoin Exchange website[18]. |
| May 26th, 2012 1:23:27 PM MDT | Information On Amount Available | Information is published to report that roughly 26% of the bitcoin expected to be in the wallets is available to be repaid[19]. The exchange has access to all of the bitcoin and reportedly no access to the fiat AUD balances[19]. |
Technical Details
Offsite Storage Of Bitcoin
dooglus was reportedly storing the bitcoins off-site[17] in a bitcoin wallet [20].
Total Amount Lost
According to information put together by dooglus on May 26th, 2012, the exchange owed customers 1,769.0417 BTC and 25,779.49 AUD at that time, which included the exchange's commissions[19]. dooglus was able to provide a wallet address with 1,768 BTC, to which they added 0.9876932 BTC from the hot wallet[19].
The total amount lost has been estimated at $26,000 USD.
Immediate Reactions
An initial announcement was posted on the BitcoinTalk forum[12].
Dear Clients,
We would like to apologize to all our clients for the lack of customer support provided over the past weeks, as of 14th February we have been faced with another banking institution issue, which includes the following;
We've had an account suspension issue with our Commonwealth processing account and are unable to execute EFT AUD withdrawals while the account is suspended. We will leave the exchange in its 'frozen' state until we are able to re-commence operations.
We've had an issue or two in the past with other banking institutions in Australia so we understand the tension this causes for customers and ourselves. However we've always managed to correct them.
We thank you for your support and appreciate your patience as we work through this.
WBX Team
Ultimate Outcome
Eventual Announcement
The World Bitcoin Exchange operator Andre eventually emailed out an announcement that the platform would be shutting down[16].
Dear Clients,
Effective immediately World Bitcoin Exchange (WBX) will be shutting down trading / deposits and returning all client funds.
Due to increasing fraudulent transactions on our accounts, WBX can not operate in it's current capacity. Combined with multiple bank account closures, we have deemed the best course of action is to halt trading.
Sincerely,
Andre Jensen
An announcement was also posted to the World Bitcoin Exchange website[18].
Dear Clients, Again we would like to apologize to all our clients for the delayed customer support provided over the past weeks, Effective immediately 15th March World Bitcoin Exchange (WBX) will be shutting down trading / deposits and returning all client funds. Due to increasing fraudulent transactions on our accounts, WBX cannot operate in its current capacity. Combined with multiple bank account closures, we have deemed the best course of action is to halt trading and return funds
As of the 20th of March we will start returning all clients BTC, we currently hold the majority of our BTC off line, which is managed by Chris Moore our Technical lead, you will be required to logon to your account and request a BTC Withdraw to your personal wallets.
The withdraw of AUD is on hold until we have a clear indication when FUNDS are returned by our bank.
We appreciate your patience. WBX Team
Inclusion In Lists
The World Bitcoin Exchange incident was ultimately excluded from a list of exchange incidents which was put together by user dree12 on the BitcoinTalk forum[21]. The reason for exclusion was that it "did not involve the theft of over one thousand bitcoins"[21].
Total Amount Recovered
There do not appear to have been any funds recovered in this case.
Ongoing Developments
It is unclear whether anything further is going on to trace down the funds.
General Prevention Policies
This is a case where simply knowing who's holding the funds and storing them properly offline with multiple signatures would have avoided the issues.
Individual Prevention Policies
No specific policies for individual prevention have yet been identified in this case.
When using any third party custodial platform (such as for trading), it is important to verify that the platform has a full backing of all assets, and that assets have been secured in a proper multi-signature wallet held by several trusted and trained individuals. If this can't be validated, then users should avoid using that platform. Unfortunately, most centralized platforms today still do not provide the level of transparency and third party validation which would be necessary to ensure that assets have been kept secure and properly backed. Therefore, the most effective strategy at present remains to learn proper self custody practices and avoid using any third party custodial platforms whenever possible.
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
- ↑ 1.0 1.1 1.2 1.3 World Bitcoin Exchange - Bitcoin Wiki (Accessed May 17, 2024)
- ↑ 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 World Bitcoin Exchange Homepage Archive October 10th, 2011 12:09:00 AM MDT (Accessed May 17, 2024)
- ↑ 3.0 3.1 Re: {ANNOUNCEMENT} WBX Exchange Frozen - BitcoinTalk (Accessed Apr 1, 2024)
- ↑ 4.0 4.1 Australian Company Numbers - Australian Securities and Investments Commission (Accessed May 23, 2024)
- ↑ Current details for ABN 61 131 700 779 - Australian Business Register (Accessed May 23, 2024)
- ↑ 6.0 6.1 6.2 HIGH NET WORTH PROPERTY PTY. LTD. ACN 131 700 779 - Australian Securities & Investments Commission (Accessed May 23, 2024)
- ↑ WorldBitcoinX - Twitter (Accessed May 17, 2024)
- ↑ 8.0 8.1 8.2 8.3 World Bitcoin Exchange Homepage Archive July 8th, 2011 12:50:05 AM MDT (Accessed May 17, 2024)
- ↑ https://web.archive.org/web/20110709034155/http://worldbitcoinexchange.com/viewnew.php?id=3
- ↑ https://web.archive.org/web/20110709034131/http://worldbitcoinexchange.com/viewnew.php?id=2
- ↑ "As a note, the supposed company was de-registered in December (4th). That is actually useful as it means rather than hiding behind a limited liability company structure, the actions have taken place by Andre as an individual and he is personally liable." - BitcoinTalk (Accessed Apr 1, 2024)
- ↑ 12.0 12.1 12.2 12.3 {ANNOUNCEMENT} WBX Exchange Frozen - BitcoinTalk (Accessed Apr 1, 2024)
- ↑ "The last I heard from Andre was on March 6th, when he wrote: i will be announcing a statement with in the next 7days on the site and forums" - BitcoinTalk (Accessed Apr 1, 2024)
- ↑ "I sent an email to the site developer and actually got a response. I'm not sure what is going on, but they don't appear to be gone yet. I'm still hopeful they'll be back, but it would help if they posted a public update." - BitcoinTalk (Accessed Apr 1, 2024)
- ↑ "Taking into account hat Andre is not answering a single e-mail I'm considering taking some legal action here. Unfortunately, I'm not from Australia but I know some people down under so I guess I'll either file it with the police there or with a regional lawyer." - BitcoinTalk (Accessed Apr 1, 2024)
- ↑ 16.0 16.1 16.2 "Effective immediately World Bitcoin Exchange (WBX) will be shutting down trading / deposits and returning all client funds." - BitcoinTalk (Accessed Apr 1, 2024)
- ↑ 17.0 17.1 "I have been holding the WBX Bitcoins in an offsite account, for safekeeping. They're all accounted for, and are available to withdraw right now for users with BTC balances. I transfer them back to the WBX wallet as and when they're needed." - BitcoinTalk (Accessed Apr 1, 2024)
- ↑ 18.0 18.1 18.2 "There's a new posting on the news page at WBX, presumably from Andre" - Bitcoin Talk (Accessed Apr 1, 2024)
- ↑ 19.0 19.1 19.2 19.3 dooglus - "Using the numbers that Andre recently provided, on top of my most recent backup shows that WBX should currently be holding 1,769.0417 BTC and 25,779.49 AUD. If we assume a price of $5 AUD/BTC then that's a total of 1,769.0417 + 5,155.898 = 6,924.9397 BTC." - BitcoinTalk (Accessed Apr 1, 2024)
- ↑ https://www.blockchain.com/explorer/addresses/btc/1DodGYjF5LFoKg186jANZV9U8znXjagSzS (Accessed May 29, 2024)
- ↑ 21.0 21.1 dree12 - List of Major Bitcoin Heists, Thefts, Hacks, Scams, and Losses [Old] - BitcoinTalk (Jan 28, 2020)