The amount of currency – if any – held by failed exchange myCryptoWallet is still unclear

The asset position of the failed cryptocurrency exchange, and whether it even holds any cryptocurrency on behalf of customers, remains a mystery.

Sole shareholder and director Jaryd Koenigsmann called in liquidators to myCryptoWallet early this month.

The amount of cryptocurrency – if any – held by failed exchange myCryptoWallet on behalf of customers is still being investigated while a campaign to sell parts of the business is set to begin soon.

A report released to creditors late last week indicates liquidator SV Partners is yet to identify any cryptocurrency actually owned by the failed company at this stage.

This will be dire news to customers, some of whom have told The Australian they are owed amounts ranging as high as $40,000.

And customers can no longer directly access their cryptocurrency if it does exist, with all assets of the company becoming the property of the liquidator.

The report indicates there are a large numbers of potential creditors, with the company having about 19,500 registered cus­tomers.

Melbourne-based myCryptoWallet failed early this month when sole shareholder and director Jaryd Koenigsmann called in liquidators.

Documents lodged with the corporate regulator by SV Partners show Mr Koenigsmann contacted the insolvency practice on November 22 to assess the solvency of the business, leading to the company being placed in liquidation on December 3.

Cryptocurrencies such as bitcoin, litecoin and ethereum are typically held in digital “wallets”, but the SV Partners report says the existence of customer wallets and the cryptocurrency they supposedly hold is unclear at this point.

“My investigations are ongoing with respect to the coins and ­wallets,’’ liquidator Terry van der Velde writes in the report to creditors. “Creditors will be updated in further reports.’’

The report indicates that customers were having trouble accessing their accounts because the company had not paid a third-party vendor to keep its two-factor authentication system operating.

They were also informed that any cryptocurrency held in wallets was technically the property of the liquidator.

“All assets of the company vest in me as liquidator of the company for the benefit of creditors,’’ the liquidator says, responding to the frequently asked question “Can I access my funds/wallets’’.

“Customers that invested money and had their coins stored through the company’s website, and can verify their deposits, may be entitled to receive a dividend. However, at this stage the quantum and timing of any such dividend is unknown.’’

No debt position was announced, apart from $250,000 owed to a related party, and the company had no money in the bank when the liquidator was ­appointed.

Mr van der Velde said the intellectual property of the business would be put up for sale, but he would not divulge an estimated value while that unfolded.

“My preliminary investigations reveal that the company’s online platform and its technological infrastructure is commercial to realise,’’ Mr van der Velde’s report says.

“Accordingly, I have engaged lawyers and valuers to assist me with the process of securing the online platform and the sale of the company’s website and intellectual property.”

SV Partners told The Australian on Monday that the asset position of the company was still being assessed.

“The exchange had approximately 19,500 customers. However, the amount and recover­ability of cryptocurrency (if any) owned by these customers is still being investigated,’’ the insolvency firm said in a statement.

Customers of the business had been complaining in about April that they were having difficulties transferring their money out of the exchange, despite assurances from myCryptoWallet that its “customer support manager has reached out to all affected users and has finalised any pending ­account issues’’.

The Australian has spoken with several customers of the ­exchange, one of whom said he was owed $40,000 and “who knows what or if I’ll get anything back’’.

“I’ve been with them since ­December 2017 and initially was a good platform but yes everything you read on issues back end and lack of communication is real,’’ said the customer, who preferred to remain anonymous.

Mr Koenigsmann launched the platform in 2017, but ran into trouble in 2019 when National Australia Bank closed its bank ­account, with myCryptoWallet saying at the time the bank “made absolutely no attempt to give us any reason or justification” for the account’s closure.

The creditors’ report lays part of the blame for the company’s failure on this development.

“The director advised me the reason for the company’s failure was due to a number of factors, including decisions made by financial institutions in or around 2019 that were unfavourable to cryptocurrency exchanges generally, as well as the time and resources dedicated towards online cyber­security threats,’’ the report says.

Before the company was placed in liquidation there were several complaints on social media from customers, with some pleading to have their money returned.

“Please, Jaryd, can you help me get the last of my money out?’’ one said. Another user wrote: “It’s not much to you but it means a lot to me. I’ve sent heaps of emails and opened a lot of tickets on the site with no success.’’

The company’s main social media account was closed shortly after the company was placed in liquidation.

A subsequent statutory report to creditors is scheduled to be released on or before March 3.

Mr Koenigsmann declined to comment when contacted by The Australian earlier this month. ­Another request for comment was made on Monday.