ICE3X Founder Denies R30m Crypto Leak Allegation

iCE3X Founder Challenges Claims of R30m Missing Crypto

The founder of iCE3X, one of South Africa's oldest cryptocurrency exchanges, has disputed claims by the company’s liquidators that over R30 million in cryptocurrency assets remain unaccounted for. Gareth Grobler, the former sole director and shareholder of iCE3X, said he has never been provided with fully-verified figures supporting the alleged shortfall.

Grobler was responding to a recent affidavit filed by the liquidators, which revealed that the winding-up of the exchange would be delayed for another year as they continue efforts to recover missing crypto-currency valued at about R30 million. The affidavit, submitted to the Master of the High Court under Section 404 of the Companies Act, stated that the liquidators are still attempting to trace missing Bitcoin and Litecoin balances and are awaiting the outcome of legal proceedings before finalizing the liquidation.

However, Grobler questioned the certainty of these figures. He mentioned that the original discrepancies in Bitcoin and Litecoin balances were identified in early 2021, and he provided preliminary estimates to the liquidators at the time. These figures were later referenced in media reporting as fact without any verification, according to Grobler.

Asset Transfers and Cooperation

Grobler maintains that he has cooperated with the liquidation process since the exchange entered voluntary liquidation in 2021. He says he facilitated the transfer of substantial cryptocurrency assets and cash to the insolvent estate in November 2021, followed by a further transfer of Ethereum in June 2022.

The Ethereum transfer had been delayed because the assets were spread across numerous key pairs, making it necessary to ensure a secure transfer with verifiable proof, he notes. “There were practical difficulties in safely transferring the Ethereum, which was held across a large number of key pairs, while ensuring there would be clear and verifiable proof of the transfer. These issues were resolved through the court process, after which the transfer was completed.”

Asked whether he is still assisting the liquidators, Grobler says his position has remained unchanged. “My consistent position has always been that users and creditors should be treated fairly and ultimately receive their coins or the value of their claims. I remain fully willing to assist further wherever it can help deliver that outcome.”

Why iCE3X Collapsed

Grobler also provided further details on the events that led to the exchange’s collapse. He said a commercial dispute with business partners prompted a review of the company’s financial position in early 2021. According to Grobler, unexplained discrepancies in cryptocurrency balances emerged during that process and could not be resolved after consultations with the company's technology partner.

“In early 2021, following advice from the company’s legal representative, I met with the individuals who were later appointed as liquidators. A commercial dispute with business partners had prompted a full review of the company’s position. When unexplained discrepancies in platform balances were identified and could not be resolved after consultation with the technology partner, I acted on professional legal and auditing advice to place iCE3X into voluntary liquidation in order to protect all stakeholders and ensure an orderly process.”

Apology to Creditors

More than five years after the process began, Grobler acknowledged the prolonged uncertainty facing users and creditors. “I am truly sorry for the impact this situation has had on users and creditors,” he said. “At the time, I believed I was acting responsibly by following professional legal advice and moving to voluntary liquidation to protect all stakeholders.”

He added that while he expected a quicker outcome, the liquidation has taken “significantly longer” than anticipated. “My consistent goal has always been for users to be made whole. The process has taken significantly longer than I expected or hoped, and I share the frustration of those who are still waiting.”

Delays Questioned

Grobler also questioned why the liquidation remains unresolved after more than five years. He said based on his understanding, there are about 250 claimants and argued the matter should have been capable of a much faster conclusion. “From my perspective, with a relatively modest number of claimants and after users were consistently advised to move to self-custody, this should have been capable of a far more efficient resolution than has been the case over more than five years.”

He further claimed he cooperated fully with the liquidators. “I also made myself available to travel to South Africa for meetings. Despite this, the liquidators chose to incur the cost of travel to London. The continued delays are difficult to justify given the scale of the matter, and I share the frustration of creditors who are still waiting for resolution.”

Lessons and New Venture

Reflecting on the collapse of iCE3X, Grobler said the experience highlighted the risks associated with relying on third-party custody arrangements. “The primary lesson is the critical importance of maintaining direct control and full transparency over customer assets at all times. Heavy reliance on third-party technology partners and custody arrangements carries significant risks, even with long-standing relationships.”

He said the experience has strengthened his belief in self-custody solutions that allow users to retain direct control of their digital assets. Grobler said he is now developing an open-source, self-custody Bitcoin wallet while also building and maintaining websites.

“My focus is on creating tools that give users greater sovereignty and control over their digital assets – principles I believe are fundamental to addressing some of the risks highlighted by situations like this.”

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