The bankruptcy of cryptocurrency exchange Zondacrypto raises questions about whether Poland can assert jurisdiction and safeguard the interests of its citizens.
Factual Background
Publicly available information indicates that the company operating the Zondacrypto cryptocurrency exchange is “BB Trade Estonia OÜ,” registered under Estonian law and listed in the Estonian e-Äriregister under number 14814864.
In Poland, it operates as a branch of a foreign enterprise (“BB TRADE ESTONIA OÜ PRYWATNA SPÓŁKA Z OGRANICZONĄ ODPOWIEDZIALNOŚCIĄ ODDZIAŁ W POLSCE”), registered in the Polish KRS under number 0001144319, with an address at ul. Ligocka 103, Katowice.
Technical support for the exchange is provided by “Orion Software Sp. z o.o.”
Legal Jurisdiction
Poland and Estonia are both EU member states. According to Article 3(1) of EU Regulation 2015/848, courts in the member state where the debtor’s center of main interests (COMI) is located have jurisdiction to initiate bankruptcy proceedings—this is the “main insolvency proceeding.”
The COMI is where the debtor regularly manages its economic activity and is recognizable to third parties; for companies, it is presumed to be the statutory seat unless proven otherwise.
Article 3(2) of the same regulation states that courts in another member state can only initiate proceedings if the debtor has a branch in that state, with the effects of such a “secondary” proceeding limited to assets within that state.
Should Poland Concede to Estonian Law?
It may appear that the only viable scenario is a main insolvency proceeding under Estonian law, with Poland limited to a secondary proceeding. However, there may be room to ensure better legal protection for Polish creditors.
The Value of Insolvency Proceedings
Insolvency proceedings are meaningful when there are assets to distribute among creditors. Declaring bankruptcy also facilitates the invalidation of actions taken by the debtor to the detriment of creditors.
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