UPDATE (16:46 GMT): Payment solutions company Payeer has shown CoinDesk evidence that it has $185,503.32 and €5,460.75 in a frozen wallet with EgoPay.
Electronic payment processor and gateway EgoPay has frozen accounts belonging to a number of its clients, including cryptocurrency exchanges such as BTC-e and Bitmarket.pl.
BTC-e told CoinDesk that EgoPay is denying it access to $80,000 of its funds having placed this sum in a "frozen wallet".
Slovakian cryptocurrency exchange GOLDUX.com confirmed $7,183 of its funds are also being withheld by EgoPay, which is based in Lithuania and registered in Malta.
The problem isn’t just limited to frozen funds, with EgoPay customers claiming some of the payment processor’s core technical features have also stopped functioning correctly.
According to a member of the team at Poland-based exchange BitMarket.pl, the EgoPay API returned several faulty transaction notifications on 28th December.
The company said:
"These notifications were posted from the usual IP address of Egopay ... and were verified correctly by the SCI callback to the www.egopay.com server. However, the funds from these transactions were not added to our wallet."
A BitMarket.pl spokesperson said the company also found it “suspicious” that the transactions had very similar ID codes, when these are normally very different.
GOLDUX.com’s representative said his company had also been experiencing problems with EgoPay’s API.
“The issue started at the end of December when we received some fraud callbacks from the EgoPay API. After that, EgoPay disabled its API and all payments were done manually,” he said.
A few days later, on 8th January, the representative received an email from EgoPay stating that a portion of GOLDUX.com’s funds had been frozen. He also noticed that payments were no longer being processed by the company at that time.
Where payments had previously been marked as “completed”, GOLDUX.com suggested they were remaining as “pending”.
When CoinDesk tested EgoPay’s API, we attempted to make a transaction but found our funds also labelled “pending”, with no further movement.
Lack of communication
When logged in as a user on EgoPay, a message is displayed notifying clients of a delay in payment processing, it states:
"EgoPay Members will be experiencing higher than normal review times for all withdrawals and deposits as EgoPay is currently conducting a system migration. EgoPay will now be able to provide a more secure netywork for all members through wihch to complate their online transfers. EgoPays standard review time frames and service level agreements will return to normal and EgoPay appreciates your cooperation and understanding.”
Not only are EgoPay’s clients dissatisfied with their funds being locked, they are less than pleased with the company’s lack of communication on the matter.
The site’s Live Support feature remains offline, even during the stated working hours, and the support team’s Skype accounts are also offline.
A representative from BTC-e, known only as ‘Alex’, said he hadn’t heard from EgoPay since 22nd December.
EgoPay’s CEO Tadas Kasputis failed to respond to requests for comment on these latest service interruptions.
The current instance isn’t the first time companies have had their funds frozen by EgoPay. On 4th August, EgoPay froze BTC-e’s account, which contained $200,000, without giving any warning or explanation.
At the time, an EgoPay customer support staff member told CoinDesk:
“We were investigating a string of suspicious transactions … in to EgoPay from several outside sources. The risk involved with these transactions ranges from losses occurring due to chargebacks and external government investigations for money laundering purposes or illegal activity funding.”
Alex said some of BTC-e's funds were released on 8th August, but that his company was then blocked entirely from accessing its EgoPay user account in mid-September, with $150,000 stuck inside.
In September, BTC-e voiced allegations that EgoPay was insolvent and had “stolen” its clients’ funds. On 23rd September, Kasputis responded to requests for comment, rebutting the accusations and accusing BTC-e of attempting "to utilize client funds for personal uses".
Both companies continued to dispute the others’ allegations of wrongdoing.
In more recent allegations, the representative from GOLDUX.com shared his belief that EgoPay’s servers were hacked in late December. He alleges that this is what affected the company's merchant API, which enabled false callbacks to be made to several of the merchants and exchangers that use EgoPay.
For now, EgoPay’s clients are continuing to wait to hear from the company, to find out if and when their transactions will be completed and whether or not they will gain access to their frozen funds. Alex from BTC-e isn't holding out too much hope, though.
"They've gone," he said.
CoinDesk is monitoring this developing story.
Money in ice image via Shutterstock