CoinLoan creditor claim submission deadline passes, filing exclusion claims still possible
CoinLoan OÜ was a cryptocurrency platform registered in Estonia, which offered multiple cryptocurrency related services and products, such as custodial wallets, fixed and flexible interest accounts, FIAT and stablecoin loans secured by cryptocurrency, as well as cryptocurrency exchange. On the 14th of June 2023, the crypto platform CoinLoan OÜ was declared bankrupt in Estonia. The first general creditor’s meeting was held on the 19th of July 2023. The next (and maybe the most) important milestone in CoinLoan OÜ bankruptcy proceedings - deadline for creditor claim submission – just passed on the 14th of August 2023 (i.e., two months from the bankruptcy declaration). What specifically lies ahead is unknown. It will take at least a month before the CoinLoan OÜ bankruptcy proceedings to reach the next stage.
Defence of claims (next stage of CoinLoan OÜ bankruptcy proceedings)
All creditor claims submitted will go through the defence of claims pursuant to procedure stipulated in the Bankruptcy Act. In sum, the trustee must go through all submitted claims and draft a preliminary creditor’s list. Once the list is complete, the trustee publishes a notification and assigns a deadline for creditors to examine the list and file objections to other creditors’ claims. The trustee finalizes the list and then submits it to the court for approval. If the court approves the list, all creditors shall be assigned the accepted claim amount and distribution ratio (simply put, a percentage the creditor is entitled to claim from bankruptcy estate) and ranking (i.e., priority of the claim). The defence of claims is in theory rather straightforward. However, CoinLoan OÜ defence of claims might become a lengthy procedure accompanied by numerous disputes due to the possibly opposing interest of different former CoinLoan OÜ clients. Distribution of assets in CoinLoan OÜ possession is already a cause for vigorous debate among different CoinLoan OÜ users (e.g., wallet vs collateral vs interest accounts).
Value of CoinLoan OÜ bankruptcy estate
(At least some) CoinLoan OÜ creditors must take a loss as there simply are not enough assets to go around to satisfy all claims. Under the Bankruptcy Act § 35(1)(1), the CoinLoan OÜ assets became the bankruptcy estate by the declaration of bankryptcy. According to the information provided by the CoinLoan OÜ trustee during the first general creditor’s meeting, CoinLoan OÜ current obligations are currently estimated at 204 M EUR and assets at 108 M EUR. CoinLoan OÜ has approximately 100K EUR in FIAT currency in foreign bank accounts. The rest of CoinLoan OÜ assets are in form of cryptocurrency. The CoinLoan OÜ trustee is yet to publish a detailed list of CoinLoan OÜ cryptocurrency portfolio. Allegedly, such disclosure would devalue the Coinloan OÜ bankruptcy estate and thus harm the creditor’s interest. Presumably this means that at least some proportion of CoinLoan OÜ assets is in form of the CoinLoan Token with questionable (if any) market value. Therefore, the actual value of CoinLoan OÜ bankruptcy estate is very likely much lower than 108 M EUR.
Exclusion claim vs. creditor claim
Many creditors are keen on collecting the cryptocurrency stored on CoinLoan OÜ (as opposed to the EUR value of said cryptocurrency). All creditor claims must be submitted in EUR as of the CoinLoan OÜ bankruptcy declaration (the 14th of June 2023, 10 AM GMT+3). Deadline for creditor claims passed on the 14th of August 2023, later submission automatically means almost the lowest rank (secured claims and timely submitted unsecured claims will prevail). Exclusion claim is the only way to claim back assets as cryptocurrency. Exclusion claims do not have a specific deadline stipulated in the law (must be filed within reasonable time). Simply put, exclusion claim is a third-party (not CoinLoan OÜ creditor) claim for exclusion of an object (includes rights) from the bankruptcy estate and the return of said object as-is to its rightful owner. For example, it can be argued that cryptocurrency stored on CoinLoan OÜ platform as collateral is a third-party owned object that ought to be excluded from CoinLoan OÜ bankruptcy estate (despite the CoinLoan OÜ factual possession). On the flipside, it can also be argued that collateral claims are just (partially) secured creditor claims which can only be claimed as EUR and must go through the defence of claims among all other claims against CoinLoan OÜ. Presumably, many former CoinLoan OÜ users submitted creditor as well as exclusion claims to cover all their basis. The exact outcome remains to be seen.
Advokaadibüroo Lepmets & Nõges is a law firm based in Tallinn. Our attorneys represent CoinLoan OÜ creditors in these bankruptcy proceedings. Feel free to contact our law firm if you have any questions regarding the CoinLoan OÜ bankruptcy proceedings and/or are looking into filing the exclusion claim. Our attorneys are happy to help out.