Over the Christmas break several smart legal minds in New Zealand and overseas have been looking at the High Court order of April 2020 and the regulations referred to in that High Court ruling.
General opinion is that there are things in the ruling that are incorrect, but because the liquidator opposed true representation of account holders, our ability to appeal the ruling is very slim, very expensive and very time consuming.
So the Cryptopia Rescue decision is to work with what we have and take the path of least resistance. This process is touched on in the court ruling and explained in the regulations.
The most interesting opinion to come out of the lawyers we have been talking to is this.
The liquidator is appointed to liquidate Cryptopia.
Cryptopia was trustee for several trusts.
Account holders were beneficiaries of the trusts.
The trustee/liquidator, under New Zealand law is not entitled to dissolve the trusts and distribute the assets.
What is happening here is the liquidator is playing on peoples desperation for resolve to get them to withdraw their assets from the trusts.
The law here also deals with beneficiaries/account holders, who can’t be identified and the steps they must take to be recognized.
Those steps require filing proceedings in the New Zealand court to prove identity and right of claim.
The costs for any single person to do that will be in the thousands of dollars and so the liquidator knows this and expects the mass majority of people will not make claim. Our opinion is that he has made the portal registration process difficult to ensure the number of people he actually settles with is very small.
From the figures that were provided to the High Court in April we estimate 2.5% at best of account holders will be paid out by the liquidator.
Cryptopia Rescue, in conjunction with our legal advisors is putting together a claims and proof of identity strategy which will help account holders get their coins back. By claiming as a group we aim to minimise the costs whilst meeting the legal requirements in New Zealand.
There is no incentive for the liquidator to return peoples coins, in fact the way he has structured things his financial reward is far greater if he doesn’t pay people their coins back.
Having said all of this we need to get a lot of people joining Cryptopia Rescue so we can spread the costs. In the coming weeks we will provide some incentives for people with small account holdings, the goal being to get everyone as much value back as possible.