- "Alex Green" reached out to Michael and I (Ferdous) a few months ago regarding the possibility of acquiring Mintpal. We have known Alex via reddit where he had a reputation of being generous and charitable. He had organized the NASCAR race for dogecar and was actively raising funds for various charities. At the time, he was one of the "good guys" in my book. I had participated in Moolah’s crowd funding, donated to his charities and I was looking to invest more in cryptocurrency space. I believed that Mintpal had the potential to be one of the top businesses in cryptocurrency space and we had the opportunity to acquire it for relatively cheap. So I jumped in at the opportunity.
- The agreement was that me and Mike would cover the cost of acquisition, and Moolah as the company will manage Mintpal for 10% of Mintpal revenues. Mike and I would own 65% of the company and divest 35% of the ownership to Alex and Moolah employees who would be working for Mintpal.
- The old Mintpal (V1) was an excellent platform. It was fast, it had a beautiful UI, but its security needed to be bumped. Alex presented himself as a security expert who worked at Citibank for years. He had already built an exchange over at Moolah that lacked a decent UI and failed due to low volume, but didn't seem to have any security flaws. So our agreement was that Alex will be in charge of a new version of Mintpal (V2), a highly secure exchange with a beautiful UI, and we would take advantage of Mintpal’s massive user base.
- To put it mildly, the V2 launch didn't go as planned. After a lot of drama surrounding self-imposed deadlines on V2 launch and several delays, Mintpal V2 eventually launched with a buggy platform, a $20 UI template and lacking features. Shortly after, Moolah declared bankruptcy due to “loss of key customers”, followed by reversal of that decision, a "public resignation” of Alex, and finally the news of a “hack” and exposure of Alex’s real identity as the serial scammer Ryan Kennedy/Gentle. All this happened within the span of a few days.
- In the fallout of Moolah/MooPay, I got in touch with Ben (who blew the whistle on Alex/Ryan), dozens of micro investors in moolah, syscoin project manager Dan, the previous owners of Mintpal and a couple of ex Moolah employees, as well as various other experts in crypto community, trying to get to the bottom of the investigation into what happened to the money that mysteriously disappeared from Mintpal V1’s cold storage. Blockchain is a public ledger, and while you can try to mix your bitcoins with others to make it hard to trace, it is difficult to move 4,000 BTCs in a short period of time without leaving a trail on the blockchain, visible by all for eternity. For example, we can see that the BTCs from Mintpal V1’s cold storage were sent to this address:
- We can then follow the small transactions from that address through various wallets to slowly trickle over here:
- We still don’t have definitive proof but it is highly likely that this is one of Alex’s wallets.
- We also did some investigation at localbitcoin where Ryan once claimed to have sold some of his personal bitcoins. One of the traders there reached out to us informing that he had done many trades with “Ryan Kennedy” aka LemonadeDev on localbitcoin:
- "He always seemed to have big supplies of coins and sometimes would release escrow without me even sending a payment, which seemed strange. I only found out about moolah and his scam a week ago and have since stopped buying from him, as the coins are probably stolen anyway. I feel bad at the moment. :("
- This trader transferred the money via wire transfer to a bank account belonging to “Ryan K” and the bank info matched with what we had on file for Ryan from some of the other Moolah investors who also wired money to Ryan on different occasions.
- We reached out to localbitcoin who banned the account immediately pending investigation but did not disclose the bitcoin address associated with the account.
- Looking at LemonadeDev’s account at localbitcoin, the first thing that jumps out is that Ryan has sold over 1,500 BTC in the past 6 months, and have access to roughly 4,000 BTC for larger sales. Those 1,500 likely includes investments raised from various Moolah initiatives such as PIE, private equity, moofarm, as well as “charities” such as Moofund for homeless shelters and “Remember Carlos”, an initiative to raise funds to help people combat depression in memory of Carlos, a respected community member who took his life after battling depression for a long time. The 4,000 BTC likely includes the missing funds from Mintpal and the 750 BTC from Syscoin held in escrow.
- We also reached out the host of Mintpal V1’s servers to inquire about Alex/Ryan and learned something rather discomforting:
- "Yeah, it has been a total mess and the guy is extremely shady.
- The servers got suspended for non-payment. A few days later Ryan opened a ticket asking why the servers were down and we told him they were suspended for non payment. He then tried to pay by cycling through credit cards, which flagged in our system as potential fraud. This blocked future CC payments under the account.
- He then tried to pay with PayPal, and we unsuspended the machines. About 6 hours later the payments were disputed with PayPal as unauthorized and we then suspended again.
- He then said it was a new PayPal account and sorry for the trouble, he would take care of it… We did not unsuspend at this point and told him the disputes need to be closed. Several days go by and they are still open and unresolved and no word from him. Finally he states he got in touch with PayPal and fixed the issue and it should be resolved within 24 hours. The disputes were closed by PayPal in his favor and all funds refunded.
- We have the servers suspended still, but at this point we are about to just consider it a lost cause.
- The guy gave us a UK address, but not once has he logged in via a UK IP address. All of the IPs are from random high risk countries (Russia, China, etc).”
- This was worrying because the old servers still held roughly 1,000 BTC worth of altcoins that failed to migrate to Ryan’s “V2” of Mintpal and the servers were about to be re-purposed, meaning the private keys of all those altcoins would be erased with no way to recover them.
- I had to make a quick decision, so I paid off the unpaid bills of the server retrospectively and brought the servers back online, removing Ryan’s access. I reached out to Ryan requesting him to hand over the control of Mintpal so we can take it from here and set up a withdrawal process for the recovered coins. Note that Michael and I were the ones who paid the entire cost of Mintpal acquisition and ever since finding out the true identity of Alex just a few days ago, Michael agreed to transfer all his shares to me making me the majority shareholder. Mintpal was a lost cause for us at this point with an unknown amount of bitcoins lost. We had also discussed a motion to disassociate ourselves from Alex and his scam during a skype conversation that followed shortly after learning Alex's real identity but no paperwork was completed to that effect. Following the recovery of the altcoins that failed to migrate to V2, I figured that at the very least, we can try to ensure that customers are refunded those coins, and perhaps even try and see if there is any way to salvage MintPal from this mess with external cash injection to cover the missing funds.
- The Skype conversation with Ryan proved futile.
- 1:09 PM Ferdous: You said earlier you will pass it along
- 1:10 PM Ferdous: I just don’t get why you are not
- Mintpal has no chance of recovery
- 1:10 PM moolah.io: Because I think you’re a bit of a cunt and I see no reason to help you at all. Withdrawal processing does not need your help.
- 1:10 PM Ferdous: You think I am the cunt here? LOL
- 1:10 PM moolah.io: You gave up control of MintPal and then took control of a Twitter account that does not belong to you.
- 1:11 PM Ferdous: You managed to lose 4000+ bitcoin from mintpal
- 1:11 PM moolah.io: Yes Ferdous, you’re a twat and you know it. I have better things to do than talk with you. You have zero association with MintPal.
- Ryan currently remains in complete control of the MintPal system; inclusive of the MintPal.com domain name, V2 database and its coin wallets/daemons except the altcoins we recovered from the old server. At this point, we have enough evidence of identity theft, fraud and theft to bring Ryan to justice and perhaps recover the stolen funds for our customers by liquidating Ryan’s assets, but I have already depleted my financial resources by now to support the ongoing legal costs personally.
- The law firm we have been working with is Selachii LLP, and I am looking into the possibility of raising $25K to cover the remaining costs in our legal battle against Ryan. A bitcoin wallet has been set up for this and will remain in the custody of one of the most trusted members of crypto community, CryptoCobain (aka Jordan Fish), who has offered escrow and lent his support in our efforts of bringing Mintpal back. If we are successful, the legal fees will be awarded against Ryan Kennedy and the bitcoins donated to cover the legal fees will be returned to the donors.
- Further resources:
- - Additional info on Ryan Kennedy and Mintpal heist: https://bitcointalk.org/index.php?topic=824211.0
- - Blockchain investigation: https://github.com/MrChrisJ/20141019-Moolah-Investigation
- - Eoghan’s experience working at Moolah: http://pastebin.com/VYpQ5CWA
- - UK’s national fraud and internet crime reporting center: Action Fraud http://www.actionfraud.police.uk
- Bitcoin wallet address to raise funds for legal actions against Ryan: 1Dbn1PZtCn2ZeJgGm54f2var2rQyEhqT2C
What happened to Mintpal?
FerdousBhai Oct 29th, 2014 (edited) 9,152 Never
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