Bitcoin Payment Processor EgoPay Has Ceased Trading, Millions in Funds Stolen?

Journalist:
January 17, 2015

EgoPay, a Bitcoin payment processor, has ceased all trading, with unconfirmed reports that founders of the company have stolen millions from customers. Merchants began to report problems in Late December when they started to have problems with the company’s API, which was returning faulty transaction notifications. When early January hit, users reported funds were frozen in their accounts with a typical response from EgoPay:

“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 network for all members through which to complete their online transfers. EgoPays standard review time frames and service level agreements will return to normal and EgoPay appreciates your cooperation and understanding.”

Also read: PayPal Weighs in on Potential Bitcoin Currency Regulations

EgoPay Disappears

After January 8th, frozen client funds disappeared from the system completely. It has been verified that all trades have been ceased and that EgoPay has not responded to my emails or the emails of other journalists from other news outlets. It was discovered that the company moved hosts yesterday, January 15th. Many companies are unable to withdraw funds from EgoPay, though it is not known where those funds are currently being held. EgoPay made an obvious effort to limit the amount of company information available to clients. The main site excluded any contact phone numbers and a physical address. The domain is also Whois Guard protected, a service that allows individuals to mask their identities. Legitimate companies don’t ever hide their contact details from clients.

EgoPay has been silent to clients and the media for over eight days now, a period that suggests that the company was a scam. While the location of the funds is unknown, missing funds from EgoPay amount to between $5-10 M USD.

What do you think about EgoPay? Comment below!

Images via EgoPay and Shutterstock.

Drew Cordell (@DrewjCordell) @DrewjCordell

Drew is an undergraduate student at the University of Texas at Dallas, majoring in Business. He is an active member of the Cryptocurrency community, and enjoys collecting, trading, and writing about various coins. Outside of the digital currency world, Drew tends to spend his time with friends, playing video games, or studying.