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The Rock Trading Crypto Nightmare: Massive Losses Spark Investor Repayment Fears

Last Updated March 11, 2024 8:37 AM
Giuseppe Ciccomascolo
Last Updated March 11, 2024 8:37 AM

Key Takeaways

  • The Rock Trading was an Italian fintech that aimed to revolutionize cryptocurrencies trading.
  • The company’s €66 million loss left investors scrambling to recover their funds.
  • Will investors get their money back?

Italian fintech platform The Rock Trading , founded by Andrea Medri and Davide Barbieri, stopped operations overnight in February 2023, leaving thousands of investors with a bitter taste. Now, creditors are trying to recover their investments in cryptocurrencies.

The latest financial results showed  a €66 million hole, raising doubts about investors’ ability to get their money back.

Out Of Business After Huge Loss

The saga of The Rock Trading, an Italian fintech platform, took a tragic turn, culminating in a sudden halt to its operations in February 2023. This abrupt cessation left a bitter taste in the mouths of thousands of investors.

The latest report, submitted on February 29, 2024, regarding the financial state of the company, paints a grim picture. Compiled by bankruptcy trustee Luigi Giovanni Saporito, appointed by Judge Caterina Macchi of the Milan court and assisted by Deloitte Financial Advisory, the report revealed staggering liabilities totaling €65,904,978.

These liabilities stem from presumed credits that are yet to be admitted to the insolvency proceedings. In contrast, the realized assets amounted to a mere €509,261. The total admitted liability thus far stands at €102,273.

This financial turmoil has left investors reeling, highlighting the need for robust regulatory oversight in the rapidly evolving fintech landscape.

From Dream To Nightmare

The glaring failure of operational systems is evident. Operating within a regulatory void, this cryptocurrency company faced significant challenges.

A critical flaw was the absence of separate bank accounts for the company’s day-to-day operations and the funds deposited by platform users. With funds commingled in a single account, control rested solely with the directors, leaving them vulnerable to potential charges of financial mismanagement.

The demise of this Italian crypto exchange, once lauded by market insiders as a potential unicorn, marks a devastating blow to the industry. The severity of the situation became apparent in March 2023, when initial complaints from customers unable to access their deposits prompted the Milan Prosecutor’s Office to deploy the Economic and Financial Police Unit of the Guardia di Finanza to investigate The Rock Trading’s offices, alongside the Currency Police Unit.

Now, with the report revealing liabilities of €66 million, prospects for investors to recoup their losses are dimming. Yet, one pressing question remains unanswered: where did all the money go?

Next Steps

The ongoing report has shed light on a sobering reality. Out of the 3,041 applications submitted, only 50 have been accepted, underscoring the magnitude of the financial crisis. With such a deluge of requests, a structured timetable has been put in place for subsequent assessments.

Time is of the essence. Following the initial hearing on January 30, 2024, the judge has scheduled another session for April 9, 2024. During this, the court will continue scrutinizing timely credit applications. However, the true extent of the financial chasm remains elusive, leaving room for further widening.

The pressing question lingers: how did this situation arise? The group, once hailed as pioneers in the cryptocurrency realm, boasted registration in the OAM register , overseen by the Supervisory Office. Theoretically, this office should have ensured compliance with sector regulations and verified adherence to legislative and administrative norms governing the industry. Yet, the unfolding crisis raises doubts about the efficacy of regulatory oversight in safeguarding investors’ interests.

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