DX.Exchange Crypto Platform Goes Through Bankruptcy Proceedings

DX Exchange vs Employees

A bankruptcy petition filed by employees of DX.Exchange alleges that the company was actually managed by CX Technologies Ltd. . 76 Current and former employees, who filed the petition, claim CX Technologies replaced the Israeli binary options firm SpotOption, a company that was raided by the FBI in January last year due to suspected fraudulent activities. The FBI’s main goal was to arrest a staff member, Yaron Labin, who had allegedly been stealing money.

SpotOption denied the allegations concerning the banned financial fraud known as “binary options,” where options either payout or don’t pay at all. Israel Securities Authority banned binary options trading in 2016. 
The Nasdaq-engine powered DX.Exchange was shut down earlier this month, stating it was looking for a merger or acquisition. 
“The costs of providing the required level of security, support, and technology is not economically feasible on our own,” the exchange stated at the time. Additionally, if a merger or acquisition doesn’t happen on time, the shutdown could be permanent, the company said.
According to the petition, the staff of CX Technologies has not received their salaries for September or October 2019, while some of them haven’t been paid for even longer. The employees also claimed that the company’s bank accounts are empty.
The company’s founder and primary shareholder Pinhas Patarkazishvili supposedly agreed with this assessment and let the bankruptcy proceedings move forward.
Additionally, several other Israeli suppliers including the cybersecurity company White Hat Ltd., the marketing company Bee2See Botan B.S. solutions, and server provider Malam Team, are also suing the company for not paying them for services rendered.
According to the petition, Miriam Mileikowsky, a relative of Israel’s Prime Minister, Benjamin Netanyahu, was a senior officer of CX Technologies and SpotOption.
DX.Exchange, which started operating in January, allowed trading in digital currencies as well as tokenized securities like Tesla and Apple stock. According to this report, the company has now removed all references to tokenized securities from its platform.