The Securities and Exchange Commission (CVM) canceled the request for exemption from registration made by Atlas Quantum so that it could operate in the market. The decision of the agency was due to the fact that the company was unable to prove the liquidity and the real functionality of cryptocurrency arbitrage.
According to the documents released by Cointelegraph, the audit report submitted by Grant Thornton was not proof of anything.
The report was only intended to validate the custody of crypto assets at brokerage firms, without this constituting “an audit or review work conducted in accordance with Brazilian and international auditing or review standards”, as Grant Thornton mentioned in the document.
“The responsibility for generating information and recording balances rests with Atlas Quantum Management. Our responsibility is to issue a report on the result of applying these agreed procedures ”.
Atlas Quantum and illusionism
In August last year, after being banned from operating in the financial market, Atlas Quantum released the report to the press as if it were a clear proof of transparency in its operations in the cryptocurrency sector.
The alleged audit procedures were based on August 2 between 9:30 am and 10:00 am. The verification conclusion said that Atlas Quantum had 15,226.1 Bitcoin and 34,793,966.2 of cryptodollars, a term referring to a basket of stablecoins.
However, Grant Thornton analysts made it clear that they did not express "any assurance about the internal control system in relation to the risks borne or the control structure of the cryptocurrency assets or in relation to the Atlas Quantum Financial Statements".
At the time that this four-page report was released to the Bitcoin Portal, you couldn't even photograph it or even copy part of its long passages. The journalist was accompanied all the time by an official in the Public Relations department of Atlas, while reading the document that at the time mentioned as "private and incomplete".
This was also the CVM's point of view, which, even after the report was added, stated that Atlas Quantum should present the appropriate document to prove the company's liquidity, which was not done.
Without proven liquidity
Atlas Quantum recognized in this process that it is an economic group formed by the companies Atlas Serviços em Ativos Digitais Ltda (“Atlas BTC”) and Atlas Project International Ltd. (“Atlas Project”).
According to the CVM, the activities explored by the companies were similar to those of collective investment contracts and that is why the “stop order” was given:
“In this sense, even if the offeror's management is related to operations with bitcoins, the characterization of a resource management activity in a broader sense cannot be ruled out, an economic activity through which it is intended to obtain the return on the security issued” .
The growing number of lawsuits against Atlas caught the attention of the CVM, which asked the business group to prove its liquidity, which was not done.
The Atlas group, in its defense, stated:
"Due to its incipient market, there are no independent specialized companies in Brazil to certify the economic viability of cryptocurrency arbitration operations".
In view of this scenario, Atlas requested a period of 120 days in order to solve this problem. This request, however, was denied by the municipality since CVM Normative Instruction 400 gives a maximum of 60 days.
Crisis at Atlas
Atlas Quantum, last year, received a “stop order” from the CVM, but still continued its irregular activity in the market. After that, Atlas even released a Report of Previously Agreed Procedures (PPA) issued by Grant Thornton as if that document were an audit.
The point is that it did not serve to contain the crisis. There was a flood of requests for withdrawals. Late payments by customers only increased more and more, until many stopped receiving. To date, six months later, no one has yet managed to withdraw the money invested.
This scandal involving the lack of payment at Atlas even drew the attention of Federal Deputy Aureo Ribeiro (SD / RJ), who requested a public hearing to discuss the possibility of a financial pyramid within Atlas Quantum.
The fact is that in the midst of this imbroglio, the Atlas group even acquired the company Anubistrade and the problem only became even greater with new clients without receiving for their investments, which decided to propose new lawsuits.