Issue link: https://maltatoday.uberflip.com/i/1008890
4 maltatoday | SUNDAY • 29 JULY 2018 MATTHEW AGIUS A court has upheld a €35.5 mil- lion garnishee order filed by a UK Bitcoin dealer against a Malta-registered payment pro- cessor in a case in which the two companies accused each other of defrauding the other. Dooga Limited had filed the precautionary warrant against Pay Secure Online Ltd (Pay- Sec), claiming that three clients had transferred money to Doo- ga to buy Bitcoins which were later stolen in an alleged hack- ing incident. Dooga's Chinese clients had filed judicial letters seeking reimbursement from Dooga as they never received the Bitcoins they paid for. The court, presided by judge Jacqueline Padovani Grima ob- served that PaySec and Dooga had signed a merchant con- tract in May 2017. In January 2018, three Chinese clients opened individual accounts with Dooga on its online plat- form called "Cubits", to buy Bitcoins. PaySec was to be the payment channel for the pro- cessing of the payments for the Bitcoins Dooga suggested that the three Chinese clients – who it said, know each other – had colluded to acquire the Bit- coins by apparently transfer- ring money through PaySec and China Union Pay – a Shanghai-based payment ser- vice provider. Dooga denied ever being the victim of a security breach. "The circumstances of the hack are dubious but point towards collusion between the three cli- ents and Paysec." But in another twist, Pay Se- cure Online said it had con- ducted its own investigation and found reason to suspect that Dooga itself or a repre- sentative or employee had sto- len the Bitcoins and defrauded the clients. In the meantime Dooga's cli- ents had asked their respective Chinese banks to recover the money they had paid out and the banks had duly blocked the funds, which amounted to €29 million. Pay Secure On- line had no access to the funds and could not pass them on to Dooga Ltd. The remaining €6.7 million was being held by Pay Secure Online under the Merchant Contract until Pay Secure On- line was allowed to carry out an audit to determine wheth- er there had been fraudulent activity on the part of Dooga Ltd. But Dooga had refused to cooperate with the audit, the court was told. Pay Secure Online instituted arbitration proceedings, dis- claiming responsibility, saying it had no control over the ac- tions of third parties and that Dooga Ltd was not cooperating to resolve the issue. The gar- nishee order was solely intend- ed to maliciously harm Pay Se- cure Online, it said. However, Dooga alleged that Pay Secure Online had staged the robbery to seize the Bit- coins for itself and argued that the court only needed a prima facie level of proof to deal with the warrant, meaning it should not delve into the merits of the case. The fact that the three Chi- nese clients transferred Bit- coins was not contested by anyone, neither by PaySec nor by the Chinese, said Dooga, ar- guing that under the Merchant Contract, PaySec is "liable for the funds from the moment it transacts to the moment it set- tles." Dooga's lawyers argued that PaySec had plotted the hack to receive the money and steal the Bitcoins. "Dooga's right to receive these moneys is clearly evident from the terms of the Merchant contract…To this day, PaySec, probably because it is in collusion with the hack- ers and/or because it probably orchestrated the fiction that it hadn't received the money in order to steal Bitcoins, is now holding on to the money which was the price of the Bitcoin." PaySec ought to have shown its good faith by placing the money in escrow with an in- dependent institution of good repute or deposit them in court until the matter was settled, said the sequestrant company. But, the court noted, Pay- sec had brought no evidence to sustain its fraud allegation, while Dooga had a prima facie right to safeguard its interests. The court observed that the plaintiff company had not asked for a further amount to protect its claim for damages. "This fact, in the opinion of the Court, shows that the al- legation of the defendant com- pany, that the warrant was filed spitefully and maliciously, is entirely unfounded." The absence of documents to back up the claim of the supposed €29 million held in Chinese bank accounts was a determining factor, as was the fact that despite admitting it was holding €6.7 million, the defendant company didn't de- posit it in court. "This shows that the plaintiffs' fears were justified," ruled the judge, up- holding the warrant. magius@mediatoday.com.mt NEWS Malta company accused of fraud in €35 million Bitcoin theft Dooga's Chinese clients had filed judicial letters seeking reimbursement from Dooga as they never received the Bitcoins they paid for Court upholds €35.5 million garnishee order filed by UK Bitcoin dealer against Malta- registered payment processor OFFICE OF THE DEPUTY PRIME MINISTER MINISTRY FOR HEALTH As part of the Project "ESF 02.083 – Developing Allied Health Capacity to Sustain Health Care Needs", the Ministry for Health has acquired European funds to sponsor candidates to undergo training in the UK to become: Orthoptists (Bachelor's Degree) Optometrists (Bachelor's Degree) Genetic Counsellors (Masters' Degree) Sponsorship covers tuition abroad, paid books and equipment, travel, subsistence whilst abroad, employment and salary whilst following the course and employment following successful completion. More information on these courses can be accessed from the Government website http://deputyprimeminister.gov.mt/en/ahcs/Pages/ESF-projects.aspx or contact: +356 2545 6831 or +356 2545 6886 Interested candidates are to submit their application by not later than 12.00 noon (Central European Time) on Friday, 10 th August 2018 through the Online Government Recruitment Portal on https://recruitment.health@gov.mt/ OFFICE OF THE DEPUTY PRIME MINISTER MINISTRY FOR HEALTH As part of the Project "ESF 02.083 – Developing Allied Health Capacity to Sustain Health Care Needs", the Ministry for Health has acquired European funds to sponsor candidates to undergo training in the UK to become: Orthoptists (Bachelor's Degree) Optometrists (Bachelor's Degree) Genetic Counsellors (Masters' Degree) Sponsorship covers tuition abroad, paid books and equipment, travel, subsistence whilst abroad, employment and salary whilst following the course and employment following successful completion. More information on these courses can be accessed from the Government website http://deputyprimeminister.gov.mt/en/ahcs/Pages/ESF-projects.aspx or contact: +356 2545 6831 or +356 2545 6886 Interested candidates are to submit their application by not later than 12.00 noon (Central European Time) on Friday, 10 th August 2018 through the Online Government Recruitment Portal on https://recruitment.health@gov.mt/ As part of the Project "ESF 02.083 – Developing Allied Health Capacity to Sustain Health Care Needs", the Ministry for Health has acquired European funds to sponsor candidates to undergo training in the UK to become: Orthoptists (Bachelor's Degree) Optometrists (Bachelor's Degree) Genetic Counsellors (Masters' Degree) Sponsorship covers tuition abroad, paid books and equipment, travel, subsistence whilst abroad, employment and salary whilst following the course and employment following successful completion. More information on these courses can be accessed from the Government website http://deputyprimeminister.gov.mt/en/ahcs/Pages/ESF-projects.aspx or contact: +356 2545 6831 or +356 2545 6886 Interested candidates are to submit their application by not later than 12.00 noon (Central European Time) on Friday, 10th August 2018 through the Online Government Recruitment Portal on https://recruitment.health@gov.mt/