Securities commission says RCMP notified about possible money-laundering concerns at Einstein Exchange

Jason Proctor
CBC Radio

Under a cloud of complaints, investigations and lawsuits, a controversial Vancouver cryptocurrency exchange has shut its doors with more than $16 million owing to customers.

The B.C. Securities Commission (BCSC) obtained an order last week appointing an interim receiver to oversee the Einstein Exchange, after filing a petition in B.C. Supreme Court claiming exchange founder Michael Ongun Gokturk could not be reached.

BCSC executive director Peter Brady told CBC News the commission has also notified the RCMP of concerns about possible money laundering raised by a former exchange employee.

“We received a number of complaints from customers of the exchange being unable to access their assets. We had sent some requests for information to the exchange twice and we didn’t get an answer,” said Brady.

“We were then talking to the company’s counsel and learned that the exchange intended to shut down within 30 to 60 days due to a lack of profit and subsequently that legal counsel stepped down, so that raised concerns for us.”

Einstein Exchange claimed in court documents it had “sufficient crypto assets to satisfy withdrawal requests from customers.”

But the BCSC claimed the exchange’s lawyers refused to specify the location of those assets.

In an affidavit, BCSC investigator Sammy Wu said he believes “Einstein improperly used their customers’ assets.”

Wu said commission staff determined that the company owes customers more than $16.3 million — including more than $11 million in cryptocurrencies and about $5 million in cash.

Wu said he went to the Einstein Exchange office last Friday and “discovered that the elevator is locked for all floors.”

“I called Gokturk’s phone number listed on their website and the recording said all their agents are not available,” Wu’s affidavit said.

“I called Gokturk and his voice mail said that he is unavailable and to send a text message since he does not check voice mail.”

Gokturk spoke to the CBC in January 2018 about a storm of online criticism that accompanied the opening of the exchange. Customers claimed that staff were slow to respond and expressed fear they might lose their money.

At the time, Gokturk claimed his team was overwhelmed by response and demand for digital currency and promised that “no one will lose their money here.”

The company’s website has been taken down but the Einstein Exchange Facebook page is still online. The page features many posts from customers demanding their money and warning others about problems.

On Facebook the company warned its customers about posting their information online because “we have been receiving many complaints that scammers have been targeting Einstein customers who have posted their account emails publicly.”

In addition to multiple customer complaints, the Einstein Exchange is also facing a pair of civil suits filed last month in relation to the transfer of cryptocurrency.

Hong Kong-based Sino Allied filed a notice of civil claim claiming it was still owed $1 million US after Einstein agreed to buy a form of currency named Tether.

And two weeks ago, Vancouver technology entrepreneur Scott Nelson sued Gokturk after claiming he had transferred 50 Bitcoin — equivalent to $535,000 — without receiving any money in return.

Nelson claimed Gokturk told him he would wire the money, but “repeatedly blamed technical issues for the failure.” Nelson said Gokturk then told him he would give him a bank draft, but none was ever delivered.

Gokturk has not filed responses to either of those lawsuits.

A default judgment was also issued last April against Gokturk and Einstein Exchange in relation to $116,789.62 owed on an American Express credit card.

The CBC was unable to reach Gokturk for comment.

Brady said the BCSC has warned investors to exercise caution when dealing with platforms that deal in cryptoassets because they tend to be higher risk.

©2020 CBC/Radio-Canada

Reliance Properties is offering remaining tenants at Berkeley Tower a financial payout that between double and triple the cash amount stipulated by city guidelines

Joanne Lee-Young
The Vancouver Sun

Developer Reliance Properties said the City of Vancouver has issued the development and building permits it needs to go ahead with a large-scale overhaul of Berkeley Towers, an older rental building on a prime corner overlooking English Bay in Vancouver’s West End.

The company said the massive renovation will take three years and require the building be vacated. It will be issuing eviction notices to remaining tenants in the next month and this will set off a four-month countdown to tenants having to be out of the building by March 31, 2020.

About half of the tenants in the 58-unit building have left, said Reliance.

On Friday, when Postmedia spoke to several tenants who still live in the building, all were considering their options and declined to speak on the record.

Tenants may choose a compensation offer based on the City of Vancouver’s tenant relocation plan, which offers cash based on length of tenancy and stipulates the developer identify three alternative rental units of the same size in Vancouver or in the same area at rates comparable to what they were paying or what the Canada Mortgage and Housing Corporation records as the average rent in the area for the previous year.

Or, they may choose to take a financial buyout offered by Reliance, which in some cases is double or nearly triple the value of the City plan. Housing advocates, however, describe these payments as seemingly generous, but meaning little when tenants then face a future of years of sharply escalating rents and fewer affordable units.

Amendments were made to the City’s tenant relocation plan in June, at least partly in response to tenants at Berkeley speaking up after the civic elections in November 2018 and a new council voting to strengthen scrutiny and compensation over “renovictions.”

Tenants at Berkeley who choose to take compensation based on the city’s plan will only be covered by the old requirements, which call for the equivalent of two months rent for every five years of tenancy to six months rent for over 20 years tenancy.

The plan amended in June allows for an increase equivalent to four months of rent for up to five years of tenancy and up to 24 months of rent for over 40 years of tenancy. There are also new requirements for developers to assist low-income tenants secure affordable housing or non-market options by either offering another unit in one of their other properties or some other interim measure.

Jon Stovell of Reliance Properties said his company’s financial offers were two to three times more than the cash compensation numbers required by the city’s original plan and still well over what is stipulated by its amended plan.

“There is a focus on a move-out plan, not a how to keep your accommodation plan,” said Coun. Jean Swanson. “A lot of it is still vague. There is a lot of ‘may consider’ and the wording (of the plan) isn’t strong enough.”

Stovell said if tenants choose to take the compensation set by the city, which is less money, but includes being presented with three alternative options for renting a similar unit, Reliance owns “some older buildings in the West End, in which some units may rent at the average and we will advise the tenants of these opportunities if and when they arise.”

But one tenant who spoke to Postmedia said he was waiting to hear from Reliance about what these three alternatives could be and that it was hard to make a decision without clear details.

Reliance bought the 60-year-old building three years ago at the height of the real estate market. The scope of its renovation project has been expanded to include a seismic upgrade, building code upgrades and a full fire sprinkler system.

© 2019 Postmedia Network Inc.

Zenterra builds to please growing families and downsizers with Langley development

Michael Bernard
The Vancouver Sun

While many developers are starting to plan for higher-density projects with relatively smaller-sized units in Surrey and Langley, award-winning company Zenterra is setting its own course by offering larger-than-average three-storey townhomes in the communities, says a company spokesman.

The developer, which has won numerous national, Georgie and Ovation awards in the multi-family sector, has also worked hard to appeal to two distinct demographics — growing families and downsizers — by mixing two- and four-bedroom homes in its new Fraser townhouse development in the Langley community of Murrayville.

“Three-level townhomes are a rarity in Murrayville,” says Manraj Dosanjh, Zenterra’s acquisitions manager. “Projects that have been brought to market in recent years have targeted the downsizer demographic in the Murrayville neighbourhood, while dismissing the fact that growing families want to plant roots in the community as well.

“At Fraser, Zenterra is looking to offer larger-than-average three-storey townhomes at prices comparable to what you’ll find for smaller homes. We feel that price point should not negatively affect the livability of our homes.” Another benefit with these starting prices is that because they fall below $750,000, they are exempt from the property transfer tax, he said.

A big draw for young families is the municipally-run W.C. Blair Rec Centre right across the street with its free-form wave pool and other water features for the kids, as well as six swimming lanes, a sauna and whirlpool for moms and dads. Dosanjh says the rec centre acts like “an unofficial backyard”, with outdoor amenities like a skate park, basketball and volleyball facilities and the gym.

Having public facilities so near means there is no need for on-site amenities, he says, which helps keep down the strata fees. That’s no doubt important to young families who are stretching financially to enter the market and to downsizers, who are looking to leave behind the expenses of single-family homes in favour of more economical “lock and go” living.

While set in Murrayville, a heritage community founded in 1870, architect Bernard Decosse has given Fraser a distinctly modern West Coast architectural feel. The homes have large overhang roofs supported by wood braces, a feature repeated at street level with smaller braces over the front doors, which are framed by more traditional brick accents. Larger windows on the second and third levels allow lots of light into the open-concept spaces within.

Inside, buyers can choose from a light or dark colour scheme. There are nine-foot-high ceilings in the main living area, and in some plans, there are vaulted ceilings in bedrooms. There is durable wide-plank laminate flooring throughout the main floor living area with plush carpeting on all upper floors, stairs, hallways and bedrooms. The entry-level foyer features easy-care porcelain floor tiles and the expansive low-E windows come with two-inch blinds.

Shaker-style cabinets are offered in contemporary and traditional styles, along with designer hardware and soft-close doors and drawers. All homes have kitchen islands with premium stainless-steel appliances and designer pendant lighting and a defined nook for additional dining space. Two-bedroom model homes feature KitchenAid appliances, including a 36-inch french door counter-depth refrigerator, a combination microwave and wall oven, a five-burner gas cooktop, a hidden control dishwasher and an AEG slide-out hood fan. Four-bedroom model homes feature an L-shaped kitchen with a similar lineup of KitchenAid appliances.

Bathrooms feature Shaker-style cabinetry with soft-close drawers, showers and bathtubs with seamless floor-to-ceiling Italian style porcelain tiles, a frameless glass door shower in the master ensuite, and a soaker bathtub in the main bathroom. There are porcelain under-mount sinks and quartz countertops. There is a powder room on the main level. Master bedrooms come with walk-in closets with an option for built-in organizers.

Standard in every home are an energy-efficient front-load Whirlpool washer and dryer, a gas barbecue hookup on balconies, CAT5 wiring for Internet, phone and TV, a smoke detector on each floor and pre-wiring for a security system. All homes feature forced-air heating with optional air conditioning and come with a full-sized garage with side-by-side parking.

Dining, shopping and retail services are all within walking distance at Murrayville Square, and there is access through Fraser Highway to key commuter routes across the region.

FRASER

Project location: 22127 48A Ave., Murrayville, Langley

Project Scope: A total of 61 two- and four-bedroom townhomes set in the heritage community of Murrayville within Langley township. Adjacent to W.C. Blair Recreation Centre with a wave pool and 25-metre swim lanes, close to two elementary schools and a high school and shopping

Prices: Two-bedroom homes ranging from 1,467 to 1,625 square feet start at $599,990 and four-bedroom homes from 1,777 to 1,820 square feet start at $664,990

Developer: Zenterra Developments

Architect: Bernard Decosse Architect

Interior designer: In house (Zenterra)

Sales centre: #1 — 22127 48A Ave, Langley (adjacent to W.C. Blair Rec Centre)

Sales contact: Bryanna Christopherson, sales manager

Sales centre hours: noon to 5 p.m. daily

Website:www.zenterra.ca/fraser

Occupancy: Immediate

© 2019 Postmedia Network Inc.