Recently, a cryptocurrency exchange addressed claims from a bankrupt entity disputing the legitimacy of its acquisition of a Cyprus-based subsidiary. The exchange emphasized that it successfully purchased this entity from previous insiders, with the transaction having been finalized and documented in official German court records since June 2024.
The acquisition process began when the bankrupt entity sold its Cyprus branch to specific former insiders in February 2024. This sale was approved by the bankruptcy court a month later and officially closed in May 2024. The exchange highlighted that the bankruptcy estate had already received payments according to the terms of the purchase agreement.
According to the exchange, this newly acquired European asset was purchased from the same insiders, reinforcing its claim to ownership. Additionally, the Cypriot regulatory authority, CySEC, granted approval for the transaction after a thorough due diligence process. The exchange also mentioned that the bankruptcy estate is required to transfer shares in alignment with the court-sanctioned sales agreement.
However, claims from the bankrupt entity suggested that neither it nor the US Bankruptcy Court had been informed about the indirect sale prior to recent disclosures. While the exchange did not cite gaining an endorsement from the US Bankruptcy Court, it remained unclear whether such approval was necessary, given that the insiders had already secured it.
The exchange publicly announced its ownership of the Cyprus entity earlier this week and corroborated its claims with a reported financial commitment of $32.7 million to acquire the regulated entity. This acquisition enables the exchange to offer derivative instruments within the European Economic Area.
In prior comments, the bankrupt entity indicated that the exchange lacked authorization to distribute any funds to its customers or creditors. It reiterated that the Cyprus entity remains solely accountable for returning any funds owed to its customers.
Despite these complications, the exchange expressed eagerness to finalize the transfer so it could begin the process of refunding former customers. It reiterated that the bankrupt estate would not be liable for any repayments owed by the Cyprus branch, which will be renamed and exclusively responsible for managing claims from previous customers.
As the situation continues to unfold, both parties remain entrenched in their respective positions regarding the legitimacy of the acquisition and the associated financial obligations.