Another Goxing scandal hits Bitcoin community : The real story behind the Mintpal accquisition gone wrong
This is the story of 2 people, Ferdous and Michael. These two wanted to do something good, but sadly got caught in a web of deceit and betrayal.
Mintpal, in its older version called Mintpal V1, was a beautiful system for crypto currency exchange. It was fast and good looking, but it lacked on the security front. An individual named Alex Green, claiming to be a security expert who had previously worked for Citibank. He said he had already built a cryptocurrency exchange on Moolah, but it failed to take off due to bad design and lack of interest by customers. Ferdous knew Alex only via Reddit. He had never met him before, nor has he met him now. But he believed Alex to be a good guy because of the charities that he organized. So he trusted him and went ahead with the deal.
The agreement was that Ferdous and Mike would cover the cost of acquisition, and Moolah as the company will manage Mintpal for 10% of Mintpal revenues. Mike and Ferdous would own 65% of the company and divest 35% of the ownership to Alex and Moolah employees who would be working for Mintpal.
Needless to say, the launch didn’t go as per plan. There were lots of problems with the development, Delays, missed deadlines, etc lead to the release of the new version of Mintpal V2 with bugs and a design template costing mere $20 and available on Themeforest. A short while later, Moolah the parent company declared that they were filing for bankcruptcy. This was a result of the loss of key customers, Alex’s very public resignation and the revelation of the true identity of Alex as a serial scammer Ryan Kennedy.
All of this occurred within a time span of a few days
As a consequence, Ferdous and Michael got in touch with cryptocurrency experts, the whistle blower and stakeholders of Mintpal to get to the bottom of this story. There was crypto currency in the servers of the older version of Mintpal, and they needed to know what exactly happened to it as well as all the currency on the new servers. They used Blockchain, through which they tracked the movement of the coins. The advantage of using cryptocurrency was, you can never eliminate the tracks. How much ever you try and hide your activity, the money trail stays on the internet for everyone to see. They tracked down the coins from Mintpal’s cold storage to this location:
And from there, through a number of smaller wallets to here, which appears to be one of Alex’s wallets:
During their investigations, they also came across one of his traders, who said “He always seemed to have big supplies of coins and sometimes would release escrow without me even sending a payment, which seemed strange. I only found out about moolah and his scam a week ago and have since stopped buying from him, as the coins are probably stolen anyway. I feel bad at the moment. :(” .
This trader transferred the money via wire transfer to a bank account belonging to “Ryan K” and the bank info matched with what we had on file for Ryan from some of the other Moolah investors who also wired money to Ryan on different occasions. They reached out to lacalbitcoin and managed to freeze the account immediately. Looking at his’s account at localbitcoin, the first thing that jumps out is that Ryan has sold over 1,500 BTC in the past 6 months, and have access to roughly 4,000 BTC for larger sales. Those 1,500 likely includes investments raised from various Moolah initiatives such as PIE, private equity, moofarm, as well as “charities” such as Moofund for homeless shelters and “Remember Carlos”, an initiative to raise funds to help people combat depression in memory of Carlos, a respected community member who took his life after battling depression for a long time. The 4,000 BTC likely includes the missing funds from Mintpal and the 750 BTC from Syscoin held in escrow. They even contacted the hosts of Mintpal’s servers, but news just wasn’t comforting, instead confirming their suspicions about Ryan.
End of story : Net effect another Goxing
Mintpal had moved on from being a Bitcoin exchange to primarily an altcoin exchange. And the issue here was that Mintpal’s servers still contained about 1000 BTC worth of altcoins and these servers were on the verge of getting re-possessed which would mean the loss of these altcoins for ever. Fedous took the decision of replaying all the bills left unpaid just to get the servers back. Michael, now realising that mintpal was a lost cause, transfered over his shares to Ferdous making him the majority stakeholder. Their only aim now was to somehow refund the investments back to their stakeholders and they spent their own money for this.
Ryan currently remains in complete control of the MintPal system; inclusive of the MintPal.com domain name, V2 database and its coin wallets/daemons except the altcoins they recovered from the old server. At this point, these two hold enough evidence of identity theft, fraud and theft to bring Ryan to justice and perhaps recover the stolen funds for our customers by liquidating Ryan’s assets, but Ferdous, having exhausted his resources, cannot afford to fight this case alone.
The law firm they have hired is Selachii LLP, and he is looking into the possibility of raising $25K to cover the remaining costs in their legal battle against Ryan. A bitcoin wallet has been set up for this and will remain in the custody of one of the most trusted members of crypto community, CryptoCobain (aka Jordan Fish), who has offered escrow and lent his support in our efforts of bringing Mintpal back. If they are successful, the legal fees will be awarded against Ryan Kennedy and the bitcoins donated to cover the legal fees will be returned to the donors.
– Additional info on Ryan Kennedy and Mintpal heist: https://bitcointalk.org/index.php?topic=824211.0
– Blockchain investigation: https://github.com/MrChrisJ/20141019-Moolah-Investigation
– Eoghan’s experience working at Moolah: https://pastebin.com/VYpQ5CWA
– UK’s national fraud and internet crime reporting center: Action Fraud https://www.actionfraud.police.uk
Bitcoin wallet address to raise funds for legal actions against Ryan: 1Dbn1PZtCn2ZeJgGm54f2var2rQyEhqT2C
Techworm hopes that this doesnt turn out to be another Mt.Gox type scandals and the BTC and other altcoin investors who had money in Mintpal receive their deserved dues.