Gigabyte Investments cryptocurrency faces liquidation amid row of major shareholders

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Investment firm shareholders disagree over why the company collapsed and at least one has reported the matter to garda

A liquidator was appointed to liquidate the business and a report was made to An Garda Sochna.

A total of 25 investors had invested 930,000 in the company, with one risking losing his entire pension in the collapse.

Managing partner Louis Curran claimed in an email to investors last week that we had been told by James Kelly that all was lost, we were told the losses were a direct result of non-leveraged trading. allowed.

I deeply regret the loss of investors’ money

In response, the Kelly family released a statement to the Sunday Independent claiming the allegation was completely untrue.

James was the founder and director of Gigabyte Investments Ltd and was therefore fully authorized to trade in cryptocurrency and related derivatives, said Kelly’s father Simon, Gigabytes company secretary.

I deeply regret the loss of investor money, said James Kelly, adding that the company culture had become toxic with stress as the crypto market crashed in 2022.

Investors said they received regular updates from the company to show the fund was up 40%. But on Friday March 24, it emerged that there was only 80,000 left in the company’s bank account. Over the weekend, a potential recapitalization was discussed, but talks fell through.

Curran, a forex trader with more than 25 years of experience at major financial institutions including JP Morgan, Citi and Merrill Lynch, emailed investors the following Monday: I am writing to bring you some very disturbing news and difficult with immediate effect, Gigabyte Investment The company ceased all market operations.

In the past 48 hours, it has come to our attention that a colleague of mine has for some time unbeknownst to us engaged in a series of unauthorized transactions which have caused the company significant, even catastrophic losses, he wrote.

Curran alleged that there appear to have been false reports of client positions and profits that had been going on for several months.

He and the company’s third shareholder, Sam Molloy, had notified the Garda’s National Economic Crime Bureau and a Garda spokesperson confirmed the case was currently being assessed.

In a follow-up email last week, Curran told investors there was an agreement that James’ role was only to implement the transactions I was leading. But documents he had seen suggested that your funds had been multiplied by 20, he wrote.

We have always been clear, both in person and on any written communication, that we took no influence, no shorts, Curran said.

But the Kellys responded that as sole director of the company, James was the company’s top executive. He is also the largest shareholder and that his power to trade, including futures contracts, has been clearly established in company documents.

Gigabyte was founded by Kelly in 2021 with school friend and fellow UCD graduate Sam Molloy. Both were 21 at the time and were crypto enthusiasts. Within a year, they had posted returns of 1,500 pc.

We were told they were always long on the market, never short

They opened a dealing room in Sandyford, south Dublin, and partnered with Curran, who became managing partner and took a 25% stake. New investors have also joined us, including former Wealth Options directors Anna McCloskey and Brian Flynn. Earlier this year, the company was valued at $3.5 million by outside advisers, Kelly said.

He sought to raise seed capital to register as an AIFM (alternative investment fund manager) in the Cayman Islands on a hedge fund platform, he said.

After the capital loss was revealed, there were exploratory talks to recapitalize but these fell apart, he said. The family saw no choice but to have a liquidator appointed. Creditors stepped in and had another liquidator named Joseph Walsh of JW Accountants instead.

An investor who lost a substantial sum told the Sunday Independent he invested because he believed in the future of digital assets and was looking for an Irish company in the space.

He had received regular reports showing that his investment was constantly increasing by at least 30% despite market volatility: they shared the transactions in real time on a WhatsApp group. We were told they were always long in the market, never short, but entering and exiting trades quickly.

It tore up my family’s future

Even after the collapse of FTX and Silicon Valley Bank, Gigabyte continued to report that it was up more than 30%, he said. So when he received the email about catastrophic losses, the investor said he was shocked and devastated.

It tore my family’s future apart, he says. When you make an investment like this, you trust people and systems. If you lose money because Bitcoin fell, just take it on the chin. But if it turns out that our money was multiplied by 20, as was alleged, well, that was never part of what I thought I was investing in.

According to the Kellys, the company documents shared with all investors and advisors clearly authorize the company to trade long and short positions in crypto. All investors were required to sign the client contract, they said. A risk statement highlighted the incredibly volatile nature of crypto and said investment loss is a possibility.

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