Users and supporters of the cryptocurrency platform TradeOgre have strongly criticized the Royal Canadian Mounted Police (RCMP) for its seizure actions against the site and its cryptocurrencies, accusing the agency of depriving innocent users of their funds due to the actions of a few.
On Thursday, the RCMP announced that they executed "the largest cryptocurrency seizure operation in Canadian history," confiscating assets worth CAD 56 million (approximately USD 40.6 million) from TradeOgre. TradeOgre is a centralized cryptocurrency exchange known for its lack of "Know Your Customer" (KYC) verification.
The RCMP stated that TradeOgre was not registered with Canada's financial intelligence agency and that the platform was used for criminal money laundering activities.
This announcement marks the first official communication regarding the exchange, which has been offline and silent for months, prompting many users to once again call for cryptocurrency holders to self-custody their assets.
The RCMP pointed out that the crackdown on TradeOgre is "the first complete dismantling of a cryptocurrency trading platform by Canadian law enforcement."
According to reports, its money laundering investigation team began investigating TradeOgre in June 2024 based on leads provided by Europol. The RCMP accused the platform of failing to register as a money service business with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and not verifying user identities.
Investigators have ample reason to believe that most of the funds traded on the TradeOgre platform originate from criminal activities, the RCMP stated in a release.
They further explained, "The main appeal of platforms that do not require user identification to open accounts is the ability to hide the source of funds. This is a common tactic used by criminal organizations for money laundering."
However, many other exchanges in the market, whether centralized or decentralized, also allow users to access some or all features without KYC verification. These platforms typically employ other monitoring methods, such as blockchain analysis technology, to prevent their services from being used for illegal activities.
The RCMP stated that the investigation is ongoing, and they are analyzing the platform's transaction data, with potential criminal charges to follow.
The Royal Canadian Mounted Police did not respond to reporters' requests for comments outside of working hours.
TradeOgre gained notoriety for listing niche, low-value, privacy-focused cryptocurrencies that are often difficult to access on larger platforms.
Users and supporters of TradeOgre have criticized the RCMP's seizure of the platform's crypto assets, arguing that many individuals using the service are not criminals and that using exchanges without KYC in Canada is not illegal.
Taylor Monahan, MetaMask's security lead, responded to the RCMP's announcement, stating, "I'm sorry to contradict your 'belief,' but as far as I know, neither my friends nor I are criminals."
Reuben Yap, a former lawyer and co-founder of the privacy-focused cryptocurrency Firo, questioned how the RCMP would handle cryptocurrencies sourced from legitimate channels. "Are you claiming you can seize everyone's balance just because we didn't do KYC? This is theft from many innocent users," he further pointed out.
The Rage reported on Tuesday that the RCMP might take over TradeOgre, with a Bitcoin (BTC) transaction associated with TradeOgre embedding the message "crypto assets controlled by the RCMP."
Since TradeOgre's X account posted its last message in May and its website was shut down on July 30, cryptocurrency users have been closely monitoring any signs of activity from the exchange.
Innocent TradeOgre users may have a way to claim the funds seized by the RCMP, but Firo's Yap warned that this "could be a long and arduous process, filled with various steps that could lead to mistakes."
He noted that the U.S. government's 2017 seizure of the cryptocurrency exchange BTC-e demonstrated that such claims processes are "extremely complicated," involving strict deadlines and a simple mistake that could "end the entire claim."
Yap added that the burden of proof required to recover assets is "extremely heavy," and affected individuals must provide "a large amount of on-chain and off-chain documentation" to prove their holdings.
"There are also issues with asset valuation," he further explained, pointing out that in most cases, the government's position is to value assets at the time of seizure.
"If the value of the cryptocurrency rises," Yap stated, "even users who successfully claim their assets may only recover a small portion of their property's subsequent value."
Related: Venture Capital Financing: A Beginner's Guide to VC Funding in the Crypto Space
Original article: “Canada's Seizure of TradeOgre Criticized as 'Theft from Many Innocent Users'”
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