Another Regulatory Warning Against Crypto Exchange Gate.io and ClavisChain!

Ben
Mon, 18 Mar 2024 10:33:33 +0000
Crypto Schemes, FMA, advcash, Banxa, ClavisChain, Coinify, Daniel Antcliff, Gate Global, Gate Technology, Gate Technology Corp, Gate.io, Karolina Rabasauskaite, Lin Han, MoonPay, Simplex, Yigo Lin

A few weeks ago, we put the crypto exchange Gate.io on our Orange Compliance List due to obvious regulatory problems, and recently, the Austrian Financial Market Authority FMA issued a warning against ClavisChain and in this context also against Gate.io. The FMA failed to provide further explanations in its investor warning. ClavisChain looks like a clone of Gate.io. We advise all traders to exercise extreme caution with ClavisChain and Gate.

Gate.io Key data

Trading name | Gate.io
Related scheme | ClavisChain (https://www.clavischain.com)

Domain

https://gate.io
https://www.gate.hk
https://www.gate.mt

Legal entity

Gate Technology Corp
Gate Technology Ltd
Gate Global, UAB
Gate Technology Inc.

Jurisdiction

Marshall Islands
Panama, Malta
Lithuania

Related individuals

Lin Han (LinkedIn)
Yigu Lin (LinkedIn)
Karolina Rabašauskaitė (LinkedIn)
Daniel Antcliff (LinkedIn)

Authorization

Registered as Crypto Asset Service Provider (VASP)
in Lithuania
Gate Technology Ltd is licensed by the
MFSA (Malta) as a Virtual Financial Assets (“VFA”) Service Provider

Payment options | Credit/debit card, e-wallet, crypto
Payment processors | Advcash, MoonPay, Banxa, Simplex, and Coinify
Compliance rating | Orange
Trustpilot | 2.7-star rating with “Poor” trust level
Warnings | Consob, CNMV, FMA

The Gate.Io Narrative

The crypto exchange was founded by Lin Han in Hong Kong in 2013 and renamed Gate.io in 2017. Since then, the exchange has operated through various legal entities in different jurisdictions. The website claims that Gate.io has over 14 million customers and a daily trading volume of $8.37 billion. Sounds very impressive, doesn’t it? Let’s have a closer look.

On Trustpilot, you can find many customer complaints and negative reviews that do not speak for the quality of Gate.io. Again and again, you read about problems when withdrawing funds. This is typically a sign that an exchange has liquidity problems.

In spring 2023, Gate.HK was launched in Hong Kong and is currently preparing to apply for licenses from the Securities and Futures Commission (“SFC”) in Hong Kong. However, in our review on October 14, 2023, we found that the Gate.hk website is not really active. All essential regulatory information is missing there as well. This is despite the fact that Lin Han claimed in an interview in February 2023 that Gate.io would already have the license in Hong Kong.

Gate.io Compliance Check

In Gate.io‘s Client Agreement, there is no indication of which legal entity you are entering into an agreement with. The website also provides no information about the operators or existing licenses or registrations. The Client Agreement specifies Panama as the competent jurisdiction. These are the first red flags.

Registering as an EEA resident is not a problem. However, even in the confirmation emails, there are no references to the operators or with whom the client agreement was concluded. Even before the KYC check was completed, we would have been able to deposit cryptocurrencies by up to $20,000 dollars using credit/debit cards via integrated payment processors such as Advcash, MoonPay, Banxa, Simplex, and Coinify.

Through Advcash, even a deposit over €50,000 would have been possible without identity verification. The ID verification worked perfectly via an online face recognition approach.

For Italian residents, the Gate.io website has been blocked since December 2021. Likewise, the warning of the Spanish regulator CNMV from February 2022 is upheld. These are more red flags.

We have placed Gate.io on our Orange Compliance list due to existing regulatory warnings and unclear information about contractors and regulations. However, we are almost leaning towards red for the compliance rating. We will, therefore, review Gate.io again shortly and check the rating.

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If you have any information about Gate.io and its operators, please share it through our whistleblower system, Whistle42.

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