Bitcoin Bank goes bankrupt by court

The Bitcoin Banco Group, which was headed by Cláudio José de Oliveira (King of Bitcoin), had its bankruptcy decreed by the Paraná State justice last Wednesday (7).

In Brazil, Law n.º 11.101, of February 9, 2005, makes it clear that companies going through the judicial reorganization process must be totally transparent and honest with customers, suppliers and, of course, with justice.

However, since it started its judicial recovery process, Bitcoin Banco has not even passed on credibility to the Public Ministry, which also followed the case. Thus, several interested parties in the group asked for the company to be convoked, according to a document that the Livecoins gained access.

“The conversion of the judicial reorganization into bankruptcy was requested by several creditors, by the judicial administrator and also by the Public Ministry.”

This happened mainly after Bitcoin Banco did not comply with its assumed obligations, a fact that, in April 2020, took the information that the Bitcoin Banco Group had been suspended from its Judicial Reorganization.

The company has been blocking client withdrawals since 2019 and, for the Federal Police chief who was responsible for the arrest of the “King of Bitcoin” and his wife, this judicial reorganization was just a tactic to swindle justice and creditors.

Judge Mariana Gluszcynski Fowler Gusso declared bankruptcy, complying with the well-founded requests of creditors.

“Thus, I understand this to be the case for the bankruptcy of the companies that make up the BITCOIN BANCO GROUP.”

Bitcoin Banco creditors have 15 days to file disputes regarding credits in the bankruptcy process

In the new bankruptcy process, Dr. Eduardo Scarpellini continues as administrator, defined by the judge of the Court of Bankruptcy of Curitiba, Paraná. He must be notified within 24 hours and start fulfilling his obligations immediately.

The judge also pointed out that, as the partners are imprisoned, the federal court must send a list of the seized assets, which will be evaluated by the Bankruptcy Court.

All assets registered by the group’s companies had been requested to be blocked by public bodies, remaining at the disposal of the courts.

Given the progress of the bankruptcy of Bitcoin Banco, creditors must pay attention to the verification of the credits, which will be carried out by the judicial administrator, and clients must contest any divergence within 15 days after the publication of the notice, as indicated in art. 7, §2 of Law 11.101/2005.

Priority now is to serve the bankruptcy estate, judge decrees

The judge also judged a request from a Bitcoin trader, who claimed to be physically disabled, Bitcoin investor, with more than 5 Bitcoins trapped in the group’s companies and that he would be in a situation of social vulnerability.

He asked that at least 2 bitcoins be released by the court, but with the bankruptcy decree, it is impossible to fulfill specific requests, as the Priority is Bankruptcy.

“The request does not deserve to be accepted. First, because with the decree of bankruptcy of the Group companies, all assets, including any existing bitcoins, will be collected to cover the payment of the huge amount of credits owed by the Bankrupt Estate.”

The judge also recalled that the judicial administrator must continue his work to find the Bitcoins held by the company, as well as wallets and their passwords.

“I understand that the judicial administrator is right in relation to the loss of the object of the claims made by the creditors, in view of the declaration of bankruptcy of the companies of the Bitcoin Banco Group, with determination for them to present the Wallet’s, token’s, passwords, public and private keys, etc., which are owned by you and in your possession, or by third parties at your command, in Court, by signing the respective term.”

For those waiting to receive some value from the company that drew attention in Brazil for the Bitcoin scam, this is a hope of recovering at least part of their investments.

It is noteworthy that, with the bankruptcy process, the courts no longer recognize individual requests for restitution, and the cases must be dealt with by the judicial administrator, according to the Bankruptcy Law.

The Federal Police estimates that there are at least 7,000 victims, with a fraud that exceeds R$1.5 billion in damages.