Alleged Cryptocurrency Broker Denied Bankruptcy By Court

Alleged Cryptocurrency Broker Denied Bankruptcy By Court

An alleged cryptocurrency brokerage operating in Brazil with fixed income promises was dismissed by the Santa Catarina court. It all happened after the suspension of customer withdrawals, still in 2021.

Cryptocurrency exchanges are platforms that mediation of buying and selling assets. That is, there is no direct service through which the company buys or sells the coins.

And based in Chapecó, a company that claimed to offer these services has registered problems with the Brazilian legal system. This is because Procon Chapecó is already investigating complaints against this alleged cryptocurrency exchange.

Alleged Cryptocurrency Broker Denied Bankruptcy By Court

In recent years, following the collapse of settlements, it has become common for their leaders to ask the court for the judicial reinstatement process. One of the most infamous cases was the Bitcoin Banco Group, when the “Bitcoin King” asked for judicial reinstatement to buy time, but was eventually arrested by the Federal Police Operation Daemon.

Now, a possible new scheme called Lifetycon Business Advice also asked for judicial recovery after problems. And this company claimed to be going through a crisis that doesn’t allow for business continuity.

“Lifetycon Assessoria Empresarial Ltda has filed a lawsuit for judicial redress, to overcome the economic-financial crisis it claims it is facing and to enable the continuity of business activity.”

The culprit of the crisis would be the fall in the price of cryptocurrencies, which sounds strange to a broker, modalities of companies that do not effectively own the coins and only earn from the margins of negotiations carried out by clients. Regardless, the company claimed the situation is transient and could get out of it.

In the analysis, the judge analyzed the report of a consultancy that found that the company no longer has its headquarters, most of the employees have already been laid off. In addition, the company’s balance sheet and income statement from recent years were not found, among a number of other issues.

Since the company has to prove that it is still pursuing a professional activity to request judicial recovery, and this is not possible, the judge rejected the bankruptcy petition.

I reject the request to process the reorganization and I consider the process closed, without resolution of the grounds, on the basis of Article 485, item VI of the Code of Civil Procedure, which puts an end to the cognitive phase of the joint procedure , in the form of Article 203, §1 of the same legal diploma

Company must pay court costs

Besides the fact that Lifetycon de Chapecó would not have the time to rebuild his operation, he will still have to pay the costs of the process. The judge also said that creditors’ petitions will not be analyzed because the case will not prosper.

By Advertising Aqui, Lifetycon has a record of several customer complaints, several of which indicate that the company was offering firm market profits with cryptocurrencies, a situation that could still be considered a case of a possible financial pyramid.

In January 2022, the date of its last public communication with its customers, the company said it had been influenced by third parties. Still, the company declined to comment on the issues and customers remain unanswered.

The report tried to contact the company to understand what the next steps are and if there is an expectation to refund customers, but got no response until the closure of this one.

Source: Live Coins