Users and advocates of the crypto platform TradeOgre have criticized the Royal Canadian Mounted Police’s (RCMP) seizure of the website and its cryptocurrency, arguing that the agency has penalized innocent users due to the actions of a select few.
On Thursday, the RCMP announced it conducted “the largest cryptocurrency seizure in Canadian history,” confiscating over 56 million Canadian dollars ($40.6 million) from TradeOgre, a centralized crypto exchange known for not enforcing Know Your Customer (KYC) protocols.
The agency alleged that TradeOgre failed to register with Canada’s financial intelligence agency and was allegedly used for money laundering activities.
This announcement marks the first official update about the exchange, which has been inactive for several months, prompting many users to advocate for self-custody of their assets.
RCMP claims TradeOgre takedown is unprecedented
The RCMP stated that dismantling TradeOgre is “the first instance of Canadian law enforcement shutting down a cryptocurrency exchange platform.”
The agency’s money laundering investigation unit began probing TradeOgre in June 2024 based on a tip from Europol. The RCMP claimed the platform did not register as a money services business with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and failed to verify user identities.
According to the RCMP, investigators believe that the majority of transactions on TradeOgre originated from criminal sources.
“The main appeal of this type of platform, which does not require user identification to create an account, is that it conceals the source of funds,” it continued. “This tactic is frequently employed by criminal organizations for laundering purposes.”
However, numerous other exchanges, both centralized and decentralized, offer features without KYC checks yet may implement alternative measures like blockchain analytics to mitigate misuse of the platform.
The RCMP indicated that the investigation is still in progress and they are analyzing transaction data from the platform and may pursue charges.
The RCMP did not immediately respond to a request for comments after hours.
Privacy advocates argue it’s not a crime
TradeOgre gained traction by listing niche, low-value, privacy-centric cryptocurrencies that typically aren’t featured on larger exchanges.
Users and supporters of TradeOgre rebuked the RCMP’s seizure, contending that many users of the service were not criminals and that using a non-KYC exchange is not illegal in Canada.
“Sorry to contradict your ‘beliefs’ but last time I checked my friends and I are not criminals,” commented 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.”
Reuben Yap, a former lawyer and co-founder of the privacy-focused cryptocurrency Firo, questioned what actions the RCMP would take regarding crypto that originated from legitimate transactions.
“Are you implying you can forfeit everyone’s balances because we didn’t KYC? That’s theft from many innocent users,” he added.
The Rage reported a potential RCMP takedown of TradeOgre on Tuesday, coinciding with a Bitcoin transaction associated with TradeOgre that included a message stating “Crypto assets controlled by the RCMP.”
Crypto users had been eagerly awaiting updates from the exchange after its X account went silent in May, and its website was taken down on July 30.
Recovering assets may be challenging and expensive
Innocent users of TradeOgre will likely have a pathway to claim their funds seized by the RCMP, but Firo’s Yap cautioned that it would likely be a long and arduous process fraught with potential pitfalls.
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He pointed out that the US government’s seizure of the crypto exchange BTC-e in 2017 serves as a case in point for how “procedurally complex” such claims can be, highlighting strict deadlines and simple mistakes that could jeopardize the claim.
Yap further stated that the burden of proof required to reclaim assets is “immense,” necessitating extensive on-chain and off-chain documentation to substantiate their holdings.
“There’s also the issue of asset valuation,” he noted, explaining that the government’s stance, in most cases, is to assess the value of assets at the time of seizure.
If cryptocurrency values appreciate, Yap indicated that “even successfully claiming parties would only receive a fraction of their assets’ subsequent worth.”
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