MyCryptoWallet Liquidation Commences, Amount of Crypto Held Remains Unknown

December 22, 2021, 10:05 AM AEST - 3 weeks ago

Liquidators for MyCryptoWallet are in the process of establishing the amount of cryptocurrency held, if any, by the now-defunct Australian crypto exchange. In the interim, out-of-pocket investors are left with little choice but to hope for the best.

Liquidation Under Way

According to documents lodged with the corporate regulator, MyCryptoWallet’s former chief executive, Jaryd Koenigsmann, first contacted the insolvency practice, SV Partners, on November 22. This drove the company into liquidation proceedings on December 3.

Soon after, the appointed liquidators commenced their campaign to sell various parts of the business, the most valuable component being its intellectual property and technology stack.

My preliminary investigations reveal that the company’s online platform and its technological infrastructure is commercial to realise … Accordingly, I have engaged lawyers and valuers to assist me with the process of securing the online platform and the sale of the company’s website and intellectual property.

Terry van der Velde, liquidator, SV Partners

Last week, SV Partners released a report to creditors where it indicated that, as of yet, it had failed to identify whether the failed business had any of its own crypto reserves.

My investigations are ongoing with respect to the coins and wallets … Creditors will be updated in further reports.

Terry van der Velde, liquidator, SV Partners

Low Prospect of Recovery?

When asked about whether individual customers could access their funds, SV Partners outlined the liquidation process:

All assets of the company vest in me as liquidator of the company for the benefit of creditors … Customers [who] invested money and had their coins stored through the company’s website, and can verify their deposits, may be entitled to receive a dividend. However, at this stage the quantum and timing of any such dividend is unknown.

Terry van der Velde, liquidator, SV Partners

While the assets of MyCryptoWallet remain unknown, liquidators confirmed that its bank accounts were empty and that it had an outstanding debt of A$250,000, owed to a related party.

As per the report, MyCryptoWallet had around 19,500 registered customers. Given the average retail investor’s proclivity to leave their crypto on exchanges, the number of creditors is expected to run into the thousands. Naturally, this would be very concerning to investors, some of whom may have lost as much as A$40,000.

A subsequent statutory report to creditors is scheduled to be released on or before March 3.

What are the chances that creditors will recover their funds in full? Undoubtedly, that ship has sailed. At best, aggrieved investors can hope to recover a portion of their investment, together with a brutal, albeit elementary, lesson – not your keys, not your coins.

As Rick tells Morty, “not your keys, not your coins”. Source: @AUnderwar

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