Documented Case

London Block Exchange (Dragon Payments Ltd)

A UK cryptocurrency exchange, later renamed Dragon Payments Ltd, was placed into compulsory liquidation in January 2020 following a creditor dispute, leaving customer and creditor claims to be dealt with through the insolvency process.

Investment type: UK cryptocurrency exchange platform
Documented investor losses: No aggregate customer loss figure has been officially published
Date / period: Winding-up order 31 January 2020
Relevant organisation: High Court / appointed joint liquidators
Nature of the matter: Insolvency — compulsory liquidation (no fraud finding recorded)

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Background

London Block Exchange was a UK-focused multi-cryptocurrency exchange. It was renamed Dragon Payments Ltd in 2019 and subsequently faced proceedings brought by a creditor.

This matter is included as a documented insolvency. No finding of fraud has been recorded against the company in the public sources available.

What customers were offered

Standard cryptocurrency exchange services allowing UK customers to buy, sell and hold cryptoassets through the platform.

What happened to customers

A winding-up order was made on 31 January 2020 and joint liquidators were appointed. Customer and creditor claims fell to be dealt with through the insolvency process, in which unsecured claims commonly rank last.

What the case demonstrates

Not every loss of cryptoassets arises from fraud. Where a platform holding customer assets becomes insolvent, the position of the customer depends on how those assets were held and whether they can be identified as belonging to the customer rather than the company.

Key Lesson

How assets are held on an exchange matters enormously if that exchange fails. Investors should understand whether their holdings are segregated and identifiable.

Source & Further Information

Companies House filing history — Dragon Payments Ltd (compulsory liquidation)
Companies House — published 31 January 2020
View the official source

These case studies summarise matters recorded in public sources including FCA publications, Insolvency Service and Serious Fraud Office material on GOV.UK, court judgments and the Companies House register. They are provided for information only, are not legal advice, and do not describe work carried out by BJM Recovery Ltd for any client. Where an investigation or set of proceedings remains open, the position stated is the position recorded at the date of the cited source.

BJM Recovery Ltd

How We Approach Investment Loss Cases

Every investment recovery matter is assessed individually. The circumstances of the investment, the available evidence, the parties involved and the applicable recovery process will determine the appropriate course of action.

Our starting point in any matter is the documentation. We reconstruct the investment chronologically from agreements, payment records, statements, correspondence and marketing material, and we establish precisely which entities and individuals were involved at each stage, and in what capacity.

We then examine what is on the public record: the Companies House position, any insolvency appointments, regulatory publications, enforcement action and court proceedings. Public records frequently determine which routes remain open, whether that is a creditor claim in an insolvency, a claim against a regulated party in the advice or pension chain, participation in a distribution administered by a regulator, or civil proceedings.

Where a matter has been formally referred to us, we deal with the referring organisation directly and work within the process that applies to that referral.

If you have lost money through an investment that has failed, become insolvent or stopped communicating, we can review the information available and set out the position clearly.

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Have you experienced something similar?

Investment losses can be complex and every situation is different. If you have lost money through an investment that has failed, become insolvent or stopped communicating, our team can assess the information available and discuss the potential next steps.

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