KIELTYKA GLADKOWSKI has been instructed in relation to an international bankruptcy case of an internet based crypto-currency club. In the case in question, the benefit to members was in the form of the crypto-currency bitcoin where members’ bitcoin grew through forex trading by a registered and regulated broker. The company convinced people who entrusted it with their funds that thanks to a tool based on artificial intelligence, it was able to invest the funds entrusted to it with unprecedented effectiveness, so that obtaining an appropriate rate of return was guaranteed. However, this was not true – the company invested the entrusted funds primarily in CFD derivatives based on various underlying instruments, resulting in losses. There was no tool based on artificial intelligence, and in fact the company’s business model consisted in using the so-called Ponzi scheme (also known as a financial pyramid). The funds of people who invested in the pyramid later were used to repay the liabilities (funds entrusted and promised to beneficiaries) of people who invested earlier. The vast majority of investors lost their money. However, due to the existence of a scheme with such specificity, there are also some people who benefited from their investment.

KIELTYKA GLADKOWSKI develops the possibilities of using standard legal structures intended for conventional enforcement of such cases, in order to forcibly collect property from dishonest club members of a financial pyramid, which focused on global investment in crypto financial instruments.

Our lawyers advise on selecting the best strategy and initiating several parallel proceedings available under the Polish procedure. These include procedures involving the recognition in Poland of a foreign judgment declaring the bankruptcy of a cryptocurrency exchange. Another procedure is a civil lawsuit involving the execution of each individual club member.

Our lawyers cooperate also with OSINT service providers to identify the club’s participants due to the fact that one of the information our team has are cryptocurrency wallet addresses. Effective enforcement of claims in cryptocurrency will also be a challenge for our lawyers due to the controversial aspects of whether bitcoin can be recognized as an asset without value or a tangible asset, as well as the assessment of the value of the claim based on the bitcoin’s value.


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