Failed Aussie Crypto Exchange May Have Been Insolvent for Years, Liquidator Says

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Liquidators for failed cryptocurrency exchange MyCryptoWallet claim the business may have traded whilst insolvent for three years before its collapse, and have drawn into question $3.4 million in ‘unfair or preferential’ transactions made by the company’s founder, the Sydney Morning Herald reported. MyCryptoWallet was a Melbourne-based exchange founded in 2017 by Jaryd Koenigsmann, which allowed users to buy and sell popular cryptocurrencies such as Bitcoin and Ethereum. It collapsed in December following concerns first raised in The Age and The Sydney Morning Herald last April that users had been unable to access funds or receive any customer support. On Thursday, SV Partners’ managing director Terry van der Velde issued a report to the company’s creditors, revealing the exchange owes nearly $4 million to customers who had funds invested in the exchange. Mr. van der Velde also claimed that MyCryptoWallet’s founding director - Mr. Koenigsmann - may have committed numerous offences whilst operating MyCryptoWallet in the past five years. These include continuing to have the company trade whilst insolvent, failing to act with proper care, failing to act in good faith, and improperly using his position to gain an advantage at the company’s expense. “My preliminary investigations reveal the estimated date of insolvency may be 30 March 2018,” Mr. van der Velde said, nearly three years before the business appointed liquidators. At this point, the exchange was experiencing trading losses and found itself unable to meet requests from customers to access their wallets. All of its bank accounts had also been closed by that point, the liquidator claims. Read more.