Crypto Firm Under Investigation: $1 Billion Withheld from Investors

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The case of the cryptocurrency company Edo MR Trade, whose clients cannot access deposits exceeding one billion crowns, will be investigated by the police. The financial consulting group Edo, which until recently was linked to the cryptocurrency company, suspects that criminal activity and deception of customers and contractual partners may have occurred in Edo MR Trade.

The case broke out in January when Edo MR Trade blocked all client funds without prior warning. The law firm Zizlavsky Sigmund Legal subsequently started dealing with the situation in the company. According to the Edo Group, the preliminary findings of its investigation show “fundamental misconduct in the management of customer assets as well as other serious circumstances.”

“The information now available to us shows that Edo MR Trade provided false information about its business and acted in violation of concluded customer contracts. Despite several calls, we also do not have an overview of the true financial status of this company’s accounts. That is why we have turned to the law enforcement authorities with a request for an investigation and we are ready to provide the police with all necessary cooperation,” said Edo MR Trade Supervisory Board Member and Edo Finance Executive Director Michal Hoffman.

“Due to the fact that the executives of Edo MR Trade do not provide the necessary information, I cannot effectively carry out the activities of a member of the supervisory board of Edo MR Trade. Therefore, as of today, I am resigning from this position in accordance with the law. We again call on the executives of MR Trade to immediately inform about the status of the company’s accounts,” Hofman added.

The executives of Edo MR Trade are Richard Procházka and Petr Prokýšek. Neighbors from Klokočná in Central Bohemia are the ones about whom the co-owner of the Edo group Jan Hlousek had previously stated that they should explain the situation. They haven’t done so yet.

“I cannot comment on such an outcry. There are things that are not correct, maybe they are over the edge. I know that the management of the Edo group is pointing the finger at me, I don’t like it, but I am not an emotional person. So I will comment on it when I have all the documents,” said Richard Procházka in a statement to SZ Byznys, adding that he is waiting for the complete results of the legal analysis and the documents that the Edo group has not yet provided.

Until recently, the cryptocurrency firm Edo MR Trade was linked to the entire Edo group through its owners. Richard Procházka was one of the main faces of the entire holding and is still its co-owner. Financial advisors from Edo finance also offered investments in cryptocurrencies.

However, after the outbreak of the case, the Edo group began to be quickly cut off from Edo MR Trade. Procházka is gradually disappearing from the bodies of subsidiary companies, on the contrary, Edo MR Trade itself falls under Procházka only from February 2.

For the Edo group and its 600 advisers and brokers, the case represents a major reputational problem. The core of its business is the distribution of regulated financial products such as mortgages or insurance policies.

“The Edo business network has been providing long-term professional services to more than 60,000 customers. Edo MR Trade products have been used by approximately two percent of our customer base. The portfolios of our clients in Edo finance, Edo reality or in the real estate fund are not affected by this situation in any way. Events in Edo MR Trade do not have a direct impact on the business of the companies in Edo holding, which offer customers regulated products and are under the supervision of the Czech National Bank and other institutions,” assures the chairman of the board of Edo finance Jan Hlousek.