Coinmetro declares bankruptcy, blames years-old failure of provider
Coinmetro, an Estonian-based cryptocurrency exchange, has claimed that it has filed “a reorganisation application to the Estonian court.”
In its announcement, it states that this is required because of “an extraordinary situation caused by a failure of one of our financial service providers.”
It further claims that it had already suspended user registrations, deposits, and withdrawals back on June 22.
Interestingly, in the Estonian register both Coinmetro OÜ and Coinmetro Group OÜ are past due on annual reports. Coinmetro Group OÜ is also listed as having a tax debt.
The announcement didn’t disclose which financial service partner led to this failure, and Coinmetro has yet to respond to Protos’ questions regarding that issue.
During a YouTube based “Ask Me Anything” with Coinmetro Chief Executive (and beneficial owner) Kevin Murcko, he claimed that it was actually more than one provider that failed, despite the announcement only claiming one.
He also claimed that there was a multi-year internal investigation, suggesting that this failure happened well before this current announcement.
Additionally, he stated that he originally believed that Coinmetro’s balance sheet was strong enough that this wasn’t originally material, but has become material as Coinmetro has approached the July 1 licensure deadline for compliance with Markets in Crypto Assets regulations.
Prime Trust
The Prime Trust bankruptcy estate (PCT Litigation Trust) filed an adversary proceeding against Coinmetro in August of last year.
This proceeding attempted to clawback withdrawals made in the days immediately preceding bankruptcy.
This proceeding claims that Prime transferred $1,205,751.10 to Coinmetro in the days before Prime’s failure.
Read more: Prime Trust accused of using customer funds to cover lost deposits
The mistakes and fraud committed by Prime apparently make it extraordinarily difficult to determine who was owed which funds from Prime Trust.
This means that Coinmetro didn’t necessarily withdraw more funds than it deposited because of the failure, and Prime Trust is trying to clawback many of the withdrawals from the final days.
Protos reached out to Coinmetro for comment, but it didn’t respond before publication.
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