MintPal Vows to Fight Former Moolah CEO in Court
The owners of the troubled digital currency exchange MintPal are moving to take legal action against former Moopay LTD CEO Alex Green.
Green, who was once known as Ryan Kennedy, is accused of stealing as much as 4,000 BTC ($1.3m at press time) in user funds from MintPal following its failed relaunch and the subsequent collapse of Moopay (more commonly known as Moolah), which assumed control of the exchange this summer. Much of the stolen bitcoin was held in cold storage under the control of Green, according to the MintPal leadership.
In the past two weeks, numerous allegations tying Green to past fraudulent behavior have emerged. Green has denied engaging in unlawful behavior, but has admitted to changing his name from Ryan Kennedy to Alex Green.
CoinDesk spoke with Ferdous Bhai, a major shareholder and director of the holding company that owns MintPal.
Bhai has released a document detailing his and partner Mike Chu’s involvement with Green and their subsequent plans to recover customer funds. To this end, he said he is working with UK-based law firm Selachii LLP, the firm representing the syscoin developers in their legal fight against the former Moolah chief.
Bhai said that the team is focused on both bringing legal action against Green in the UK and, in the long-term, providing restitution to users who lost bitcoin following the closure of MintPal.
“How messy [the process] gets really depends on how cooperative Ryan is. The altcoins that didn't migrate to MintPal V2 – we estimate that to be around 1,000 BTC worth – we can return to users. The other missing amounts, including missing bitcoins, are still with Ryan and hopefully we can get him to cough up those as well. Then, we can return the bitcoins to customers and rebuild, rebrand from there.”
CoinDesk reached out to Green for comment but had not received a reply by press time.
Promising start gives way to chaos
According to the document shared by Bhai, the partners saw promise in the original MintPal platform and the team at Moolah working under Green. Given MintPal's troubled security history but past success in building trading volume, the opportunity seemed legitimate.
“At the time, [Green] was one of the 'good guys' in my book. I had participated in Moolah’s crowdfunding, donated to his charities and I was looking to invest more in cryptocurrency space. I believed that MintPal had the potential to be one of the top businesses in the cryptocurrency space and we had the opportunity to acquire it relatively cheaply. So I jumped at the opportunity.”
Chu and Bhai were set to own 65% of the company, with the remainder afforded to Green and Moolah developers working on the MintPal V2 project. The failed relaunch and the turmoil surrounding Moolah created an environment that, according to Bhai, gave Green an opportunity to begin moving customer funds out of cold storage.
Bhai's account of the affair included a Skype exchange he had with Green, during which time the now-ex Moolah CEO blamed the MintPal leadership for the loss of customer funds. Bhai was later compelled to pay off Moolah’s unpaid server bills, which nearly resulted in the loss of roughly 1,000 BTC in customer funds that failed to migrate during the switch from the original platform to the new one.
Bhai said that as of today, Green remains in control of the cache of bitcoins, the amount of which he says is difficult to estimate. He cited activity under a LocalBitcoins account presumed to be owned by Green as evidence that most, if not all, of the funds held by Green have already been sold.
Bhai added that, if true, this means Green is in violation of an injunction granted Monday by the UK High Court against him and Moolah.
Recovery just beginning
Bhai conceded, both in his statement and in conversation with CoinDesk, that MintPal’s future as a digital currency exchange is far from certain. What comes next, he said, is an effort to bring charges against Green and regain control of the funds previously held in cold storage.
He wrote in the statement:
“At this point, we have 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 I have already depleted my financial resources by now to support the ongoing legal costs personally.”
Bhai explained that the team hopes to crowdfund $25,000 to help pay for the legal effort. According to Bhai, digital currency trader Jordan Fish, known more commonly by his Twitter handle CryptoCobain, will hold control of any funds raised.
— CRYPTO CO฿AIN (@CryptoCobain) October 30, 2014
Fish later suggested that Andreas Antonopoulos could help manage control the funds, and several community members have since pledged support for the project.
Bhai said that the legal effort to get the funds is the MintPal team’s top priority. Funds raised to help support their suit will be returned to donors if the bid is successful and Green is held liable for both the missing bitcoins and the legal fees associated with the case.
Boost VC Demo Day: Meet Tribe 4's Bitcoin Startups
Bitcoin Foundation's New Head Patrick Murck Outlines Future...