🌋 HectorDAO Initiates Bankruptcy Proceedings Under U.S. Law
posted 21 Jun 2024
HectorDAO has filed for Chapter 15 bankruptcy in the U.S. Interpath Advisory, a firm specializing in insolvency cases, has pinpointed three primary causes for this outcome: the collapse of the Terra ecosystem, a breach in the Multichain protocol, and a subsequent theft from HectorDAO's treasury.
Interpath Advisory reports that the investigation into the last incident is ongoing, as there are suspicions that former project managers orchestrated the $2.7 million hack. However, the most severe financial impact ($16.4 million) resulted from Do Kwon's fraudulent activities and the subsequent collapse of the Terra ecosystem.
The non-judicial liquidation process was initiated on July 15, 2023, following community approval. The initial plan was to distribute the available assets among all investors. However, the treasury was compromised during this period, and the appointed members of the liquidation committee have since disappeared and remain uncontactable.
Interpath Advisory is currently managing the remaining assets. It's important to note that Chapter 15 bankruptcy does not aim to reorganize the project but simply moves the proceedings under U.S. jurisdiction. This is especially relevant for organizations and companies with a broad base of international investors.
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