On November 14, 2022, the Inlock platform was forced to suspend its services in order to secure its customers’ assets due to a damage incident. Subsequently, a Recovery and Restructuring Plan has been developed with the aim of managing the incident in a customer-tailored manner. The Plan included a number of alternative solutions, all of which were implemented in 2023. These included early payouts, the Exit Payout program, and migration to the reboot platform. The Scheduled Release program was designed for customers who did not wish to take advantage of other alternative options.

The details of the Scheduled Release program were published on 2nd April 2023 and payments have been made since 28 April 2023. The objective of the Scheduled Release Programme is to achieve the highest possible asset value (in USDC) for clients who have suffered a loss in the event of the damage but did not wish to take advantage of the opportunities offered by previous asset-based payout programmes (e.g. switching to the Vigiler platform or the Exit Payout programme with loss deduction, etc.).

In the one and a half years since the services suspension, we have closed thousands of customer claims, and as of today, we are now managing the assets of only 300 customers who were affected by the claim and opted for the asset value based Scheduled Release programme. The fixed asset value at the time of the claim of the clients covered by the program is $3,211,277,- of which USDC 2,466,393,- have been converted and paid out as of April 28, 2024. This means that the platform has fully paid out more than 75% of the value of the assets recorded at the time of the damage.

The payout ratio may vary from client to client, given that the exchange rates of different assets have changed and continue to change in different ways since the damage occurred. Clients will receive a monthly summary letter of the current situation, which will include the assets and the value of the assets at the time of the claim and the amount of the payout since then.

The fixed asset holdings and its asset value is calculated back to the time of the loss, which may have been affected by a number of factors since then, such as:

  • Our customers can still use the internal transfer function today. For the calculation of fixed asset holdings and its asset value, the black box principle has been applied for internal transfers, given that internal transfers do not affect the total assets at the time of suspension of services.
  • Until February 2023, the Inlock platform offered the possibility of a swap service, which was used by a large number of our clients. With the swap operations, our customers could retroactively adjust the asset holdings at the time of the loss. They were even able to increase the asset holdings and thus the asset value at the time of the loss!
  • To date, it is possible to both deposit and swap ILK tokens, which is countered by the USDC marketplace provided by the Tokenmarket service. For the calculation of the fixed asset holdings and its asset value, the blackbox principle has been applied for ILK swaps and tokenmarket transactions, respectively, given that all ILK swaps are executed on an internal marketplace.
  • Clients were able to benefit from the Early Settlement programmes. The assets covered by these programmes have been fully withdrawn from the asset pool at the time of the loss.
  • Our customers were able to migrate to the Vigiler platform. The assets covered by the programme have been fully withdrawn from the asset holdings at the time of the incident.
  • Between August and September 2023, coins that were held by a small number of customers and the cost of maintaining the wallets exceeded the damage per coin were removed from the Inlock platform. These coins could be withdrawn or converted to USDC by our clients without loss deduction. The assets withdrawn were subtracted from the asset holdings recorded at the time of the loss, while the USDC holdings resulting from the conversion were added to them.

In the monthly email notification of the Scheduled Release process, our customers will also find the asset holdings and their asset values at the time of the services suspension calculated for their account. The following exchange rates will be applied during the process:

  • BTC: 16905.06 USDC
  • ETH: 1256.83 USDC
  • LTC: 57.34 USDC
  • USDC: 1 USDC
  • USDT: 1 USDC
  • BNB: 280.1 USDC
  • LINK: 6.278 USDC
  • ADA: 0.3323 USDC
  • UNI: 6.0097 USDC
  • SOL: 14.11 USDC
  • LUNA: 1.6707 USDC

IMPORTANT to note that the asset value payout percentage in the email notification is not capped at 100%! Once the 100% asset value fixed at the time of the service suspension has been reached, the payment will continue to be made each month at the same rate as before. The counter will change accordingly, so you will see values above 100%. As asset prices are highly volatile, it is not possible to make an accurate estimate in advance, but based on the current situation, we can already say that our Scheduled Release clients will receive more than 100% of the value of their assets at the time of the services suspension. The exact amount will depend largely on the composition of the balance and the future exchange rate movements of the coins in question.

The most important factor, beyond exchange rate volatility, will be the outcome of pending legal proceedings. Since the last status report, no substantial progress has been made in the legal proceedings, which remain under police investigation. Meaningful positive progress is expected when the parallel bankruptcy proceedings of the FTX crypto exchange enter the payment phase.

The bankruptcy of the FTX crypto exchange is proceeding in parallel in Bahamian and US courts. The trustees in bankruptcy and liquidators have agreed to cooperate in a joint statement to ensure that payments are made as soon as possible. In order to reach a settlement, the first payments will begin as early as the end of 2024.

Although the expected settlement of the FTX exchange will only have an indirect impact on the settlement of the Inlock platform, its occurrence could significantly accelerate the ongoing legal proceedings and significantly increase the maximum asset value payout available to the Inlock platform under the Scheduled Release Programme. The Inlock platform continues to stand by its statement issued on 2 April 2023, which states:

Q: When can I expect to get 100% of my assets back?

The Scheduled Release is expected to be completed in 3 years. If the legal process is successfully resolved or we are able to self-fund the full compensation, this could potentially lead to a 100% payout within this timeframe.