HectorDAO has filed for Chapter 15 bankruptcy in the US
HectorDao, a decentralized independent company, has filed for Chapter 15 bankruptcy following a series of market crashes and data breaches in the United States that left the community without funds.
According to a June 17 filing from Interpath Advisory, a court-appointed firm in bankruptcy management and reorganization, HectorDao's current financial situation is primarily due to three factors – the failure of the Terra network in May 2022, the failure of the Multichain protocol, and the hack that affected Hector's treasury. .
In the filing, Interpath Consulting said it is still investigating whether the Jan. 16 hack, which led to the withdrawal of $2.7 million in funds from HectorDAO, was an inside job by former administrators of the DAO's treasury.
The troubled history of Hector Dao
The Decentralized Community Problem It began in 2022 with the collapse of the Terra ecosystem, which caused a massive $16.4 million loss to Hector Dao's treasury. Despite the setback, HectorDao members continued to operate normally for more than a year until July 17, 2023.
In the year By July 15, 2023, HectorDao community members must transfer the decentralized organization to another blockchain and change the name of the project or liquidate all assets and shut down the organization. Two days later, 83% of DAO members voted to dissolve the DAO based on the HIP-42 vote.
RELATED: Julian Assange's brother rejects AssangeDAO soft carpet claim: ‘It's just a lie!'
After the vote, the decentralized public administration body established a committee to oversee the investigation and distribution of remaining assets.
However, when the assets were distributed among investors, Hectordao suffered a $2.7 million windfall. The members of the decentralized organization said that it was not possible to establish contact with the inquiry committee following the incident on January 16.
This led DAO members to accuse the leadership team of negligence and complicity in the hacking. Finally, the Hector community requested that control of the remaining funds be handed over to an independent party – Interpath Consultants.
What is Chapter 15?
Chapter 15 bankruptcy filings allow investors with foreign entities or investors to file bankruptcy proceedings in the United States court system in international jurisdictions.
A Chapter 15 filing does not, by itself, reorganize an entity's holdings or restructure debt—it provides a way for corporate entities, firms, and investors to resolve these issues in US courts.
Magazine: Deposit Risk: What do crypto exchanges do with your money?
