The original discrepancies in Bitcoin and Litecoin balances were identified in early 2021.
The founder of iCE3X, one of South Africa’s oldest crypto-currency exchanges, has challenged claims by the company’s liquidators that more than R30 million in crypto assets remain unaccounted for.
Gareth Grobler, the former sole director and shareholder of iCE3X, says he has never been presented with fully-verified figures supporting the alleged shortfall.
Grobler was responding to ITWeb after liquidators revealed in a recent affidavit 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, filed with the Master of the High Court in terms of Section 404 of the Companies Act, states that liquidators are still attempting to trace missing Bitcoin and Litecoin balances and are awaiting the outcome of legal proceedings before finalising the liquidation.
However, Grobler disputed the certainty of the figures.
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“The original discrepancies in Bitcoin and Litecoin balances were identified in early 2021. At the time, I provided the liquidators with preliminary estimates of the position. Those figures were later referenced in media reporting as fact without any verification, to my knowledge,” he told ITWeb in an interview.
“From my perspective, I have not been provided with fully-verified and audited figures that conclusively support the current claimed shortfall of over R30 million. I remain available to assist with any further clarification or verification that could help resolve outstanding questions.”
His comments come after liquidators indicated they continue to pursue recovery efforts before distributing the remaining assets to creditors.
Grobler maintains he has cooperated with the liquidation process since the exchange entered voluntary liquidation in 2021.
He says he facilitated the transfer of substantial crypto-currency 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.”
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 crypto-currency 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.”
iCE3X was among South Africa’s earliest crypto-currency exchanges before it suspended trading in 2021 and subsequently entered voluntary liquidation.
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.”
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.”
The liquidators have previously attributed the delay to ongoing efforts to recover missing crypto-currency assets and unresolved legal matters that they say must be finalised before distributions can be completed.
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.”
His remarks come as creditors continue to await the outcome of the liquidation process, which liquidators have indicated is unlikely to be concluded before additional recovery efforts are completed.
