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On 8 March 2023, the Grand Courtroom of the Cayman Islands appointed Joint Provisional Liquidators (“JPLs”) over Atom Holdings (the “Firm”), a Cayman included holding firm for the Atom Group, which operated a cryptocurrency alternate through an internet platform often called AAX (Atom Asset Alternate).
In accordance with an AAX August 2022 press launch, AAX had a spot buying and selling quantity of USD$57.2 million in July 2022 and boasted over 3 million customers in over 160 nations. Nevertheless, in November 2022 (shortly after the crypto alternate FTX filed for chapter in america), AAX abruptly ceased operations and didn’t course of hundreds of excellent buyer withdrawal requests. The administrators and administration of the Firm resigned or in any other case ceased to speak with prospects and the web platform was not accessible.
On 6 March 2023, plenty of retail prospects of AAX (the “Petitioners”) petitioned the Cayman Islands Courtroom for the winding up of the Firm on the idea that it was unable to pay its money owed and in addition that it was simply and equitable for the Firm to be wound up. The Petitioners additionally utilized for the pressing appointment of JPLs over the Firm for the aim of defending and preserving the Firm’s property pending the dedication of the winding up petition.
On 8 March 2023, the Courtroom appointed JPLs over the Firm with the next powers, amongst others:
- to take any steps of their discretion for the safety and preservation of the Firm’s property and to forestall the dissipation or misuse of the Firm’s property and people of its subsidiaries;
- to research and report on the affairs of the Firm and its subsidiaries inside and out of doors of the Cayman Islands, together with in Seychelles, Singapore, Hong Kong, and Malta;
- to establish and take possession of the property of the Firm;
- to look at people on oath or in any other case if the JPLs think about it expedient for the aim of defending the Firm’s property;
- to take management of subsidiaries of the Firm and to handle the affairs of such subsidiaries; and
- to take steps essential to freeze or protect property held by any particular person in opposition to which the Firm has a declare and the place there’s a danger of dissipation.
Remark
The Courtroom’s appointment of JPLs on this matter demonstrates that the Cayman Islands Courtroom continues to be adept at coping with purposes for the preservation of property on an pressing foundation. The appointment of provisional liquidators in such circumstances stays a key software for the prevention of additional dissipation or misuse of an organization’s property and gives scope for an intensive investigation into the affairs of the corporate.
The appointment of JPLs additionally presents scope for recognition of the Cayman appointed officeholders in different jurisdictions. Cayman Islands provisional liquidations have beforehand been accepted as “international proceedings” beneath Chapter 15 of the US Chapter Code and elsewhere as a matter of personal worldwide regulation. The JPLs of the Firm on this case have, in truth, just lately sought Chapter 15 recognition in america Chapter Courtroom within the Southern District of Florida.
With the so-called “crypto winter” being not fairly over, it stays to be seen whether or not the Cayman Courtroom shall be confronted with related purposes in respect of different digital asset exchanges or crypto-related companies within the coming months (for a round-up of authorized instruments out there in crypto-related disputes extra usually see our abstract here). Within the meantime, litigants can relaxation assured that the Courtroom has as soon as once more demonstrated its capacity to successfully deal with pressing purposes for the preservation of property pending the dedication of winding up proceedings.
Conyers have efficiently obtained related aid in lots of different circumstances earlier than the Cayman Islands courts and have additionally assisted with acquiring recognition in a number of jurisdictions on behalf of officeholders.
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