In the past year, we have made every effort to handle the incident announced on November 14, 2022, which necessitated the suspension of services as effectively as possible, aiming for transparency and high involvement of affected customers. Our primary goal was to provide payment options to our customers as soon as possible, despite the incident, including options that allow access to their assets without loss in case of unfavorable resolution of the incident.

Below, we would like to briefly summarize what has happened so far and present what can be expected in the upcoming period. We will address the ongoing tasks: compensating reboot platform clients, legal proceedings related to compensation, scheduled release, and the soon-to-be-concluded Exit Payout program.

– Incident Resolution –

Assets worth $766,000 were paid out from the Inlock platform through the Early Payout program in the weeks following the incident.

Assets worth $14.66 million were migrated to the Vigiler platform without any loss.

$108,000 was paid out with a time-limited full payout option in March 2023.

As of April 20, 2023, the Exit Payout program, which was announced in addition to the loss write-off, has settled claims for $2.51 million.

Through these payment and migration programs, the claims of over 2,000 users have been fully settled on the Inlock platform, reducing the claims by $18.7 million.

Customers who did not utilize any of the mentioned payment programs were automatically included in the scheduled release program, through which an additional $1.45 million worth of USDC assets have already been paid out to 550 clients.

Customers participating in the scheduled release program have additional claims of $7.29 million, backed by $5.69 million worth of assets on the Inlock platform.

The asset values for customers in the program have been calculated using the exchange rates provided in the table below, and the table also explicitly shows the location of the individual assets:


The inventory data listed in the table above can be freely verified at the following addresses at any time:

Address transparency ->
BTC 16UubKDBYiC1jJ2cU79F1SnJzWKTtxKo6R
ETH/BSC 0x8b20de31286b1c22564b57029481449c0b835349
LTC LWArzQf2MdR3XBxMx1t69VbbFbLaPGdmiV
Cardano addr1q9hh2yt6ss4d4le4pdua080wvdc3ll2ck7hwckmc24tlwux9wa…
8uqh7parm0d7rqvuzexj9wg5nnn95pv3fkg5p2rt0sk3kz7n
Solana E4K7CGqK7jE81a1pwLAZLuQ6QUbbK8wDAdLumUF1DHxj
Terra terra1zatk8rxf0jg2krzd8rmv3jh8q7vdjku3am4lgk

To check, it is recommended to use the more popular block explorers: BTC and LTC: blockchair.com, ETH: etherscan.io, BSC: bscscan.com, Cardano: cardanoscan.com, Solana: solscan.io, Terra: finder.terra.money

Summarizing the results of the first year in terms of payouts: Assets worth $20.15 million have been paid out or withdrawn from Inlock, while the platform currently holds 78.01% of the remaining user claims. The Inlock platform successfully reduced the damage, which initially exceeded $7 million at the time of service suspension, to $1.5 million. This reduction was achieved partially through loss-bearing programs and mostly through the conversion of damage into compensation balances on the Vigiler platform, where nearly 7% of the compensation balances have also been released in the meantime.

– Steps Taken for Recovery Over the Past Year –

On November 14, 2022, the Inlock platform suspended its services due to an incident. During this incident, more than $7 million of customer funds were trapped in the FTX platform, which had filed for bankruptcy, primarily due to an error by one of our service providers.

To manage the incident, the platform’s reserve fund was immediately released, and the founders also made efforts to reduce the remaining damage. The majority of the damage was in the form of USDC stablecoin, but a significant amount of BTC and ETH was also affected. The favorable exchange rate developments in the past year further increased the dollar value of the damage.

The first step in handling the incident was to isolate the incurred damage, which led to the suspension of services. The recall and settlement of ongoing loan transactions began immediately. In parallel, partial payout programs were initiated in the weeks following the incident. In this program, customers with significant stablecoin holdings participated and agreed to a 30% loss write-down. Two more rounds of the “Early Payout” program were organized in December 2022 and January 2023, in which all customers were involved.

The Inlock Recovery and Restructuring Plan [RRP] was completed by December 31, 2022. The document scheduled various payment and damage settlement programs for February 2023 and April 20, 2023. The team completed all programs and committed developments on time.

On January 19, 2023, the first specific action plan of RRP was introduced: the rescue of the ILK token ecosystem. The developments outlined in this plan were also completed on time, allowing the platform’s native token (ILK) to maintain its value despite the suspended services.

In January 2023, migration to the reboot platform (Vigiler) began. Customers had the opportunity to migrate until April 20, 2023, during which approximately $15 million worth of assets were transferred.

In March 2023, thanks to the contributions of some Inlock Prime members, the platform was able to launch a limited-time full 100% payout program for customers with assets not exceeding $1,000.

In early April 2023, the detailed rules for the Exit Payout and Scheduled Release programs were released. The migration program was completed in the second half of April, and the payout programs were initiated.

By the end of May 2023, Inlock had fully completed all the developments committed to, in the RRP and in the restoration of the ILK ecosystem. In addition to the development related to the recovery programs, the ILK token market was restarted, the Badge conversion and transfer were completed, and the Badge auction system was introduced. Additionally, within limited constraints, the ILK token and USDC deposit options were reinstated on the Inlock platform.

– Legal Proceedings –

The incident announced on November 14, 2022, was caused by the platform’s collateral liquidation process. The substantial amount of institutional asset placement required involving contractual partners who could provide coverage through OTC transactions, tie fixed-price sale options, and maintain such coverages, potentially involving hundreds of bitcoins. The party responsible for the incident’s occurrence, one of the partners involved in this collateral management process, was the cause of a significant amount of liquidated collateral getting stuck on the FTX exchange just before it filed for bankruptcy. The partner defined the incident as a vis major event and made the settlement contingent on the settlement of the FTX bankruptcy proceedings.

Inlock initially tried to resolve the dispute peacefully and through mediation. However, due to the failure of these efforts, the case was taken to legal action. In the meantime, it was revealed that the partner in question had accumulated a significant debt, exceeding several hundred million dollars, due to similar transactions.

On January 9, 2023, our legal representative sent a payment request and demand letter to the partner responsible for the damage, titled “CLAIM FOR IMMEDIATE PAYMENT OF UNFINISHED TRADE SETTLEMENT AND DAMAGES CAUSED.” Since the partner did not respond to multiple legal notices, a police report was filed with the Singaporean police on February 6, 2023. Based on the report received in early March, the investigative work began by examining the documents attached to the submission. According to feedback from the police, they are handling numerous similar cases concurrently (economic criminal offenses), which makes the actual investigation phase uncertain in terms of duration and outcome.

As of the September 2023 feedback, the investigative phase is progressing very slowly due to the large volume of data and unclear circumstances. It is further impeded by the collection of evidence and witness testimonies, as the partner is uncooperative and communication with them is challenging. Based on the recommendation of the legal team, efforts are currently underway to expedite the legal process and possibly escalate it to a court level. Given the current status, substantial progress is expected in the second quarter of 2024. Clients will receive continuous updates on the progress of the case.

– Upcoming Steps –

Customers can decide on their participation in the Exit Payout program until December 31, 2023. Customers who do not take advantage of the Exit Payout program must accept the terms of the Scheduled Release program and provide their receiving address by December 31, 2023. This condition is necessary for the continued activation of their Inlock account after January 1, 2024.

For accounts that have not accepted any of the payment programs, they will be considered “abandoned accounts” and will be closed after December 31, 2023.

We remind customers that, in accordance with the Republic of Lithuania Law on the Prevention of Money Laundering and Terrorist Financing, we are obligated to retain personal data, including financial data, for eight years following the termination of the business relationship. Additionally, customers with “abandoned accounts” will not have any further rights or claims against the service provider.

After November 2022, the platform and the company behind it were restructured to focus on resolving the incident to the greatest extent possible. As a part of this, operational costs were reduced, and processes related to damage settlement were developed exclusively in the Inlock Web Application.

To avoid misunderstandings arising from differences between the Inlock Web Application and the Inlock Mobile Application, the Inlock Mobile Application was removed from the Google Play Store and the Apple App Store. On December 1, 2023, the support for the Inlock Mobile Application will be officially withdrawn. After this date, customers can only access their accounts through the Inlock Web Application at https://app.inlock.io.

No further developments are planned for the Inlock platform’s features in 2024.

Starting in 2024, the Gold Badge distribution will be reinstated. The conditions will be the same as the conditions before the incident. Every customer with an active Inlock account will receive 1 Gold Badge per 1 million ILK tokens on a quarterly basis. The eligibility is based on the lowest ILK balance in the 90 days preceding the badge distribution. The received badges can be freely transferred to the Vigiler platform or sold through the Inlock Badge Auction system.

Support for Silver and Bronze Badges will be discontinued, but the inventories of customers with active accounts can still be converted freely after December 31, 2023.

The Inlock platform will continue to operate within closed boundaries until the completion of the Scheduled Release program and the successful withdrawal of all customer claims related to the incident.