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Bankruptcy of The Rock Trading: How to Recover Lost Cryptocurrencies?

28 Apr 2023 - Forex Litigation - Min Read 4 min
Bankruptcy of The Rock Trading: How to Recover Lost Cryptocurrencies?

Were you involved in the bankruptcy of The Rock Trading? Have you lost your cryptocurrencies?

The judicial liquidation (a procedure that replaced bankruptcy) of The Rock Trading S.r.l., an Italian cryptocurrency exchange that allowed trading on cryptocurrencies, which ended up at the center of an investigation with allegations of fraud and embezzlement, to the detriment of thousands of customers, has been certified by a Milan court ruling dated 14/04/2023.

Since February 2023, customers have been waiting to be able to recover their cryptocurrencies: judicial liquidation will allow the assets of the insolvent company to be liquidated. They will distribute the proceeds in favor of creditors, i.e., those who held cryptocurrencies or funds on TRT, who will thus be able to recover, at least in part, what belongs to them.

The Court of Milan has revoked the directors of Digital Rock Holding, the company that controls The Rock Trading, and appointed a court-appointed administrator. In the meantime, the financial police (Guardia di Finanza) have seized the keys where the assets are supposed to be.

The restitution procedure will involve payment almost exclusively in cryptocurrency.

How to Recover Cryptocurrencies Held on The Rock Trading

In order to recover cryptocurrencies held on The Rock Trading, it is necessary to file an “application for the filing of a claim in the bankruptcy proceedings” by 09/25/2023, which is 30 days before the hearing set to examine the claim.

At the hearing, the judge will examine the applications received and the admission proposals made by the bankruptcy trustee.                                                                  

Of course, the time limit may change and be postponed.

To be accepted, the applications will have to be accompanied by documents proving the right to reimbursement. First and foremost, the account activation emails, and all those interspersed with TRT that contain important information.

Details of all transactions and proof of deposit transfers will have to be attached too, as demonstrating just the balance is not enough.

What we know about The Rock Trading?

The Rock Trading srl is a Malta-based, Italian-run cryptocurrency trading company that has been active in the market since 2011.

It was one of the first to offer bitcoin trading in Europe.

The company was duly registered with the MFSA, Malta Financial Services Authority, Malta’s financial supervisory authority, so it was operating in the market in a regulated manner, and it was registered with the OAM, the body exclusively and independently competent to manage the Lists of Agents in Financial Activity and Credit Brokers, another requirement that allowed it to work in legality, proving that nothing foreshadowed the current situation.

There had been warnings of problems, within the company, only in 2021, when the owners reported a hacking attack on the company “Onedime” which provided digital services to The Rock Trading Srl.

Accordingly, a shortfall of 904,000 euros was reported.

At the end of February 2023, a statement on the site, directed to investors (more than thirty thousand), informed how the money they had placed in bitcoins was frozen due to “difficulties encountered in liquidity management.”

Since then, the only operations allowed to users have involved consulting the balance and movements made.

The investigation revealed serious responsibilities of the management, which did not differentiate users’ assets and ended up mixing everything into one “hot wallet,” regardless of the cryptocurrency owned.

The alleged shortfall is 15-20 million euros, but the investigation is ongoing and other figures may emerge.

What To Do to Recover Cryptocurrencies?

Users need to pay attention to the deadlines, because the only way to recover cryptocurrencies from The Rock Trading is to submit the appropriate application.

A lawyer will be able to check the documentation and best advise on how the application should be submitted in order to be successful, but the PEC to apply for a refund is available to everyone, professional or not.

As a reminder, there is time until 09/25/2023 to submit an application for the settlement at the PEC address: [email protected].

In the PEC should be mentioned:

  • Procedure in which you intend to participate and name of the creditor (judicial liquidation of The Rock Trading S.r.l.);
  • Amount of your claim (how many virtual currencies you owned at the time of closing);
  • Exposition of the facts and elements of law justifying the claim (activation and subsequent emails, transactions, transfers …);
  • Indication of whether you have preemptive title;
  • Pec address on which you want to receive any communication.

In anticipation of the European regulation on cryptocurrencies expected by 2024, the so-called MICAr (Markets-in-Crypto-Assets Regulation), which could avert future similar situations, our attorneys in the Forex Litigation Department are closely following the case of The Rock Trading.

Do not hesitate to contact them for information and assistance.

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Calogero Boccadutri

Calogero Boccadutri is the Managing Partner of Boccadutri International Law Firm. He has trial experience in Forex, Personal Injury and Administrative litigation.

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