Canada’s TradeOgre seizure slammed as ‘theft from many innocent users’

Users and supporters of the crypto platform TradeOgre have slammed the Royal Canadian Mounted Police’s seizure of the website and its crypto, accusing the agency of taking funds from innocent users because of the actions of a few. 

The RCMP said on Thursday that it carried out “the largest cryptocurrency seizure in Canadian history,” taking over 56 million Canadian dollars ($40.6 million) from TradeOgre, a centralized crypto exchange known for having no Know Your Customer (KYC) checks.

The agency claimed TradeOgre failed to register with Canada’s financial intelligence agency and that it was used for criminal money laundering.

The RCMP’s announcement is the first official update on the exchange, which has been offline and silent for months, leading many users to renew advocacy for others to self-custody their assets.

RCMP says TradeOgre takedown is a first

The RCMP said its takedown of TradeOgre was “the first time that a cryptocurrency exchange platform has been dismantled by Canadian law enforcement.”

It said its money laundering investigations team started looking into TradeOgre in June 2024 on a tip from Europol. The RCMP alleged that the platform failed to register as a money services business with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and didn’t identify its users.

A notice in English and French on TradeOgre’s website showing its seizure by the RCMP. Source: TradeOgre

“Investigators have reason to believe that the majority of funds transacted on TradeOgre came from criminal sources,” the RCMP claimed.

“The main attraction of this type of platform, which doesn’t require users to identify themselves to make an account, is that it hides the source of funds,” it added. “This is a common tactic used by criminal organizations that launder money.”

But many other exchanges, both centralized and to a greater extent decentralized, do not have KYC checks to use some or all of their features. Instead, they may implement other checks, such as blockchain analytics, to stop the nefarious use of their services.

The RCMP said its investigation is ongoing and it’s analyzing transaction data from the platform, which it may follow up with charges.

The RCMP did not immediately respond to a request for comment outside of hours.

Privacy is not a crime, crypto pundits argue

TradeOgre rose to popularity for listing niche, low-value, privacy-focused cryptocurrencies that typically didn’t make the cut for larger platforms.

Users and supporters of TradeOgre criticized the RCMP’s seizure of the platform’s cryptocurrency, arguing that many who used the service were not criminals and that using a non-KYC exchange is not a crime in Canada.

“Sorry to contradict your ‘beliefs’ but last time I checked my friends and I are not criminals,” said MetaMask security lead Taylor Monahan in response to the RCMP’s announcement.

“Very much looking forward to seeing the evidence, and for you to provide recourse to ALL innocent parties you stole money from without notification and without due process.”

The Rage reported a possible RCMP takedown of TradeOgre on Tuesday, as a Bitcoin transaction tied to TradeOgre was embedded with the message “Crypto assets controlled by the RCMP.”

Source: Jameson Lopp

Crypto users had been watching for signs of life from the exchange after its X account last posted in May, and its site was taken down on July 30.

Asset recovery could be difficult and costly

Innocent TradeOgre users will likely have a way to claim their funds seized by the RCMP, but Firo’s Yap warned it was “likely to be a long and difficult process with lots of ways to make a mistake.”

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He said the US government’s seizure of the crypto exchange BTC-e in 2017 was an example of how “procedurally complex” such claims could be, with strict deadlines and simple mistakes that could “kill the claim.”

Yap added that the burden of evidence required to reclaim assets “was immense,” with those affected having to give “extensive onchain and offchain documentation” to prove their holdings.

“There’s also the issue of the valuation of the assets,” he added, noting the government position, in most cases, is to value the assets as they were at the time of seizure. 

If the value of the crypto rises, Yap said that “even successful claimants would still only get back a fraction of their property’s subsequent worth.”

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