Lykke Business has been officially declared bankrupt, shocking customers and creditors who were unaware of the company’s financial troubles. The announcement, made by the Zug authorities on December 16, has raised serious concerns about the management practices of the company’s founder and CEO, Richard Olsen.
Background of the Bankruptcy
The difficulties for Lykke began in June of the previous year when a hack resulted in the loss of a third of its crypto deposits. Despite this significant setback, Olsen continued to project an image of financial stability, often making claims about the company’s soundness and the competitiveness of its IT platform. His assurances included promises to refund customers their deposits, totaling 60 million francs, along with potential compensation for lost crypto profits.
However, these optimistic claims now appear to be unfounded in light of the recent bankruptcy. Many customers and creditors are left questioning the credibility of Olsen’s statements and the overall management of the company.
Legal Implications
In the aftermath of the bankruptcy, numerous customers and creditors are contemplating legal action against Olsen. Some individuals with substantial claims, referred to as “whales,” are preparing to file criminal charges, while a larger group with smaller claims is opting for simpler criminal complaints through local authorities. The accusations against Olsen include misappropriation of customer funds and delaying the closure of the business.
This situation raises serious concerns about Olsen’s management practices and the potential legal ramifications he may face. As investigations proceed, the distinction between poor business practices and legal violations remains unclear, although the presumption of innocence still applies to him.
Family Involvement and Financial Scrutiny
The situation is further complicated by the involvement of Swisschain, a company that acted as the custodian for Lykke’s funds. Notably, the CEO of Swisschain is Richard Olsen’s son, adding a familial dimension to the unfolding drama. This connection has led to increased scrutiny of the relationships and decisions made within the company.
Olsen’s financial situation has also come under scrutiny following Lykke’s bankruptcy. In his tax self-assessment, he reported assets of zero francs, leading to speculation about whether he was already bankrupt before the company’s collapse. While he previously managed a successful exit with Oanda, his current predicament raises questions about his financial acumen and decision-making.
Impact on the Crypto Landscape
Lykke’s bankruptcy represents a significant event in the Swiss crypto landscape, marking the first major case of its kind in the country. The responsible authorities will face challenges in navigating the complexities of this situation, which involves both financial and legal dimensions. The outcome of this case could set important precedents for how similar incidents are managed in the future.
As the crypto market matures, the Lykke case serves as a cautionary tale for investors and entrepreneurs alike. It highlights the critical need for transparency and accountability in a landscape where technological innovation and financial risk can create volatile situations. Stakeholders in the crypto space will be closely monitoring the developments and the lessons that can be drawn from this situation.
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