Here’s a snippet of the latest I received from the Bankruptcy Court. Looks to me like Ronny just told them Open Ledger got hacked and lost ALL tokens and coins. All of it! You can skip all the legal stuff and go down to Point 5 and 2. 5.2 to read the hacking story.
OpenLedger ApS in bankruptcy
Applebys Plads 7, DK-1411 Copenhagen K
20 March 2014
1 January 2018 – 31 December 2018
As trustee of OpenLedger ApS in bankruptcy, I hereby send you a statement of the bankruptcy estate’s affairs and an account of the most important reasons for the bankruptcy.
1 List of assets and liabilities
No assets have been identified in the estate.
- 1.2.1 Pre-preferential claims etc.; see section 93 of the Danish Bankruptcy Act It is not yet possible to determine the administration costs etc. relating to the trustee.
- 1.2.2 Preferential claims; see section 94 of the Danish Bankruptcy Act
- 1.2.3 Unsecured claims; see section 97 of the Danish Bankruptcy Act
Total liabilities (preliminary amount)
DKK 10,000.00 DKK 3,016,656.11 DKK 3.027.406,11
The above list is preliminary as claims are still being proved against the bankruptcy estate.
2 Reasons for bankruptcy
According to information from the Danish Business Authority, OpenLedger ApS, CVR no. 35809171, (the “Company”) was formed on 20 March 2014 by Karen Lagcao Grano. At the formation, the share capital was DKK 66,899 which, according to information from the Danish Business Authority, was paid in cash at par.
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According to the registration with the Danish Business Authority, the Company’s objects were “to provide software development services and other related services subject to the manage- ment’s discretion”.
The Company’s executive officer was Thorvald Peder Kristian Ronny Boesing who joined on 20 March 2014 and left on 15 October 2020.
The Danish Business Authority decided to compulsorily dissolve the Company on 16 October 2020 as the Company had failed to submit the annual report for the period from 1 January 2019 to 31 December 2019 to the Danish Business Authority. In the light thereof, the Maritime and Commercial High Court appointed attorney Søren Aamann Jensen as liquidator on 1 December 2020.
Following certain examinations, the liquidator confirmed that the Company was insolvent. On 5 January 2021, he therefore requested that the Maritime and Commercial High Court commence bankruptcy proceedings against the Company. On 27 January 2021, the Maritime and Com- mercial High Court issued a bankruptcy order against the Company and appointed attorney Søren Aamann Jensen as trustee.
- 3 About the Company’s operation The former executive officer of the Company has informed the trustee that the Company devel- oped and was operating a platform which performed the functions of an exchange where the users could trade in virtual currency. The former executive officer of the Company has also informed the trustee that the Company’s bankruptcy was the result of a combination of a dramatically reduced interest in cryptocurrency due to COVID-19, the lack of foundation for investors’ interest in future investments due to the Company’s history of several failed projects and insufficient liquidity.
- 4 Most important accounting figures since latest annual report
4.1 The Company’s latest annual report
The latest annual report covers the period from 1 January 2018 to 31 December 2018, and the
annual report was approved at the Company’s general meeting held on 4 July 2019.
It appears from the Company’s annual report that, on 31 December 2018, the Company owned assets of a total value of DKK 10,965,744 consisting of finished development projects of DKK 5,649,559, shares in associates of DKK 4,238,575, receivables of DKK 766,000 and cash at bank and in hand of DKK 227,789.
The former executive officer of the Company has informed the trustee that the Company’s shares in associates consisted of shares in the company Aetsoft LLC which the Company sold
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off in the spring of 2019. The trustee has received and reviewed the sales agreement and con- firmed that the sales price of EUR 575,100 was set off against the Company’s debt owed to Aetsoft LLC. As a result, the amount never reached the Company’s bank account.
During the review of the specifications for the annual report, the trustee confirmed that the Com- pany’s receivables mainly consisted in receivables from three group enterprises and a receiva- ble relating to the Company’s tax account and a receivable relating to payroll tax. The three group enterprises have either been dissolved or bankruptcy proceedings have been com- menced against them, and the Danish Tax and Customs Administration (SKAT) has proved a claim of DKK 552,000 against the bankruptcy estate. In the light thereof, the trustee is of the opinion that the receivables represent no value to the bankruptcy estate.
During the review of the Company’s statements of bank accounts, the trustee confirmed that the cash and cash equivalents were used in the course of business.
As at 31 December 2018, the Company’s equity and liabilities consisted of equity of DKK 6,440,710, deferred tax of DKK 1,242,903 and current liabilities other than provisions, including trade payables, payables to group enterprises etc., of DKK 3,282,131.
It appears from the specifications for the financial statements that the Company owed the former executive officer of the Company a total amount of DKK 1,979,421 as at 31 December 2018.
At present, claims under section 97 of the Danish Bankruptcy Act have been lodged against the bankruptcy estate for a total amount of DKK 3,016,656.11.
4.2 The Company’s bank account
The Company had two bank accounts, namely a foreign currency account and a business ac-
The trustee has reviewed the Company’s foreign currency account for the period from 5 July 2018 to 19 August 2019 when the bank account was closed. This shows several payments to and from the bank account, and, based on the information available to the trustee, they all ap- pear to be operating payments.
The trustee has reviewed the statement of the business account for the period from 29 June 2018 to 15 May 2019 when the bank account was closed. The entries to the Company’s busi- ness account may be divided into two different payment types:
- Payments immediately related to the Company’s operation, including payments relating to Google AdWords, domain, LinkedIn, pay, etc.
- Payments relating to transport, restaurants and hotels.
Payments relating to restaurants and hotels in the period from 29 June 2018 to 15 May 2019 amount to a total of DKK 950,000.
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The trustee has presented this information to the Company’s executive officer who says that the expenses relating to transport, restaurants and hotels may be categorised as entertainment expenses used in the former executive officer’s marketing of the Company and its products and services. In the light thereof, the trustee is of the opinion that the Company has not provided unlawful loans to the former executive officer.
Based on the information available, the trustee is of the opinion that no voidable payments have been made from the bank account.
4.3 Review of the Company’s tax account
The trustee has reviewed the Company’s tax account for the period from 16 October 2019 to
the date of the bankruptcy order on 27 January 2021.
It appears from the Company’s tax account that the Company was registered for VAT, tax de- ducted from income at source (A-skat) and labour market contribution (AM-bidrag). It appears that the Company has reported and paid VAT, tax deducted from income at source and labour market contribution on a regular basis.
The Danish Tax and Customs Administration (SKAT) has proved a claim against the bankruptcy estate for a total amount of DKK 552,290.17; of which DKK 14,328.06 is related to the Compa- ny’s debt to the Danish Tax and Customs Administration (SKAT) and DKK 525,162.11 is related to debt originating from the joint taxation with the company Copenhagen CCEDK Holding ApS.
5 Investigations of voidable claims and mandatory notices to the police
- 5.1 Investigations of voidable transactions
The trustee has not identified any voidable payments during the review of the Company’s affairs, including the Company’s statements of bank accounts.
- 5.2 Notices to the police As described above, the Company’s business was to operate a platform where users could trade in cryptocurrency. The former executive officer of the Company has informed the trustee that the main reason for the commencement of bankruptcy proceedings against the Company is that a hacker gained access to the admin user of the platform and emptied the user accounts of cryptocurrency. According to the information available to the trustee, the hacker had access to the platform for approx. one month. According to the information available to the trustee, the incident was reported to the police who were unable to help recover the stolen cryptocurrency. Further, a local investigation was
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launched in Belarus, but that did not lead to any explanation of where the cryptocurrency had gone either.
However, during the administration of the estate, the trustee has been approached by several creditors of the estate who have informed him that they have lost large holdings of cryptocur- rency. The creditors say that they have not been informed of the cyberattack and that they, therefore, do not believe that it has taken place.
The estate does not have the funds to conduct a thorough investigation into whether the platform was attacked or to verify the information about the cyberattack received by the trustee from the executive officer.
However, when going through the Company’s e-Boks, the trustee identified two letters from the police. One of the letters contained a receipt for the filing of a report of unauthorised access to computer data from Openledger.info. The other letter contained information that the police would close the investigation into the report filed as the police decided that it would not lead to a charge against the offender. The reason for the police decision was that the police had found information during the investigation suggesting that the offender(s) came from India or England and that it would not be realistic to bring criminal prosecution abroad in this case.
In the trustee’s opinion, a further investigation into the cyberattack and the extent thereof should not be conducted as part of the bankruptcy proceedings but rather by the police if deemed relevant by them. As a result, the trustee will inform the police thereof. In that respect, the trustee draws attention to the fact that the two letters from the police identified in the Company’s e-Boks indicate that the police have already investigated and assessed the offence.
- 6 Disqualification – Recommendation to the bankruptcy court not to commence disqualifi- cation proceedings In the trustee’s opinion based on the information available to the trustee, the conditions for im- posing disqualification have not been satisfied. As a result, the trustee recommends not to com- mence disqualification proceedings against the former management. It should be noted that the trustee may change his opinion later if he were to receive new infor- mation in the case.
- 7 Assets and liabilities Since the date of the bankruptcy order, the administration of the estate has essentially consisted in regular correspondence with certain creditors of the Company, examination of the Company’s affairs, including investigations of voidable transactions and disqualification, and detailed dis- cussions with the Company’s executive officer about the Company’s business.
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The total hours spent on the administration of the estate as at today amount to 13 hours, which have been distributed on the work described below:
- − General administration of estate, including handling of claims proved, ongoing discussions with creditors, etc.: approx. 5 hours. The time was spent evenly over the period.
- − Obtaining and reviewing information, including particulars, bookkeeping etc.: approx. 2 hours. The work was performed in April 2021.
- − Investigations of voidable transactions and disqualification and investigation of circum- stances relating to the cyberattack: Approx. 3 hours. The work was performed in April 2021.
- − Creditor information letter and notification to the bankruptcy court: approx. 3 hours. The time was spent evenly over the period.
- 8 Future administration of the estate The future administration of the estate will consist in drafting final documents for the purpose of closing the estate as soon as possible at a creditors’ meeting convened for that purpose.
- 10 Communications concerning the bankruptcy estate Any communications concerning the bankruptcy estate must be directed to the trustee, attorney Søren Aamann Jensen, and attorney Nanna Sofie Jensen, Accura Advokatpartnerselskab, Tuborg Boulevard 1, DK-2900 Hellerup, by phone to +45 3945 2800 or by email to firstname.lastname@example.org. Any communications concerning proofs of claim must be directed to secretary Jeanette Hansen, Accura Advokatpartnerselskab, Tuborg Boulevard 1, DK-2900 Hellerup, by phone to +45 3945 2800 or by email to email@example.com.
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Accura Advokatpartnerselskab Søren Aamann Jensen
Nanna Sofie Jensen Attorney-at-Law
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