June 24, 2022

7th Circular to Creditors
Dear Sirs,
Torque Group Holdings Limited (In Liquidation) (“Torque”)
BVI Company Registration Number: 2024611
I refer to the Circular dated 10 May 2021 (the “4th Circular”), in which the Liquidators provided
creditors with an update on the progress of the Torque liquidation (the “Liquidation”) andfindings from the preliminary report to creditors (“Liquidators Report”). I also refer to the
Circular dated 7 June 2021 (the “5th Circular”) and the Circular dated 20 October 2021 (the“6th Circular”), in which the Liquidators informed creditors of applications OS 439 and ORC
5699 filed by the Liquidators’ Singapore counsel, Rajah & Tann Singapore LLP, in the
Singapore Hight Court.
Unless otherwise defined herein, capitalised terms used in this circular have the same
meanings as those defined in the 4th Circular (including the Liquidators’ Preliminary Report to
Creditors dated 7 May 2021 (the “Liquidators’ Report”), 5th Circular and 6th Circular(collectively, the “Circulars”).
The purpose of this circular (the “7th Circular”) is to provide creditors with an update on the
Liquidators’ progress to date and next steps.
A. Investigations and Planned Recovery Actions
1.

The Liquidators have concluded investigations into the Crypto Asset Losses and haveidentified legal actions against individuals that will be pursued through the BVI andSingapore Courts as planned recovery actions (the “Planned Recovery Actions”). On
30 May 2022, pursuant to the Singapore Court’s direction, the Liquidators administeredinterrogatories on Bernard Ong requesting further information concerning thebusiness, dealings, affairs and property of Torque, including information that could
facilitate the Planned Recovery Actions. Bernard Ong has been directed to respond to

Kroll Advisory (BVI) Limited
3rd Floor, Commerce House
P.O. Box 3339
Road Town, Tortola VG1110
British Virgin Islands

T +1 284 393 9300

www.kroll.com

Page 2 of 9

the interrogatories by 27 June 2022, and depending on his response, the Liquidator
has the option of requiring Bernard Ong to be examined personally in Court.
2.

It is important that the Liquidators do not compromise the potential routes to recoveries
by disclosing details of the findings of their investigations or Planned Recovery Actions
through legal actions publicly. The Liquidators however can disclose that these include
legal claims that are broadly of the nature of breach of director’s duties and claims
available under BVI Law.

3.

There were no audited financial statements or reliable information from management
accounts and no statements of account of the Torque Binance Account or any otheraccount held by Torque on any other cryptocurrency exchange. The Liquidators haveworked closely with Kroll Cyber experts and the Binance information technology team
to extract transactional information from back-end systems of Binance that has allowed
for reconstruction of financial information. This includes reconstruction in relation to
the Torque Binance Account involving 100’s of millions of lines of transactions acrossthe Main Binance Account that has over 240 sub-accounts.

4.

In the course of their investigations, the Liquidators have also utilised cryptocurrency
analytics and tracing experts regarding asset tracing related to the Crypto Asset
Losses, including extensive blockchain analysis. Investigations have revealed anapparent dissipation of assets however the Liquidators have yet to identify viable
avenues of direct traceable asset recoveries identified by the Liquidators, including inconnection with the Unauthorised Trades and Misappropriated Assets.

5.

The Liquidators have also utilised outside investigators to try to establish thewhereabouts of Zee and his associates and to identify his personal assets. Zeeremains at large and the investigations regarding his personal assets continue.

B.

Assets6.

On 25 May 2021, the Liquidators obtained an order of the BVI Court (the “Order”)
which confirmed the Liquidators’ conclusions, based on BVI and Singapore legal
advice, to establish the legal entitlement to Torque’s different categories of Crypto
Assets as between creditors. Please refer the Order at Annexure A to this 7th Circular.

7.

The Order directed that the Liquidators have the permission of the Court to:
7.1

treat the Trading Wallet Crypto Assets as forming part of the assets of theLiquidation with liberty to apply granted to any person claiming a proprietaryinterest in the same and aggrieved by the decision;

7.2

treat the Personal Wallet Crypto Assets as not forming part of the assets of theLiquidation;

7.3

reactivate the user personal wallets functionality to allow users to withdraw theirassets; andPage 3 of 9

7.4

convert or otherwise exchange the Torque’s Crypto Assets into U.S. dollars (oralternatively, to Tether (“USDT”). That conversion is currently continuing.

Trading and Cold Wallet Crypto Assets
8.

The status and value of Torque’s Crypto Assets as of 13 June 2022 reflecting theprevailing market prices as of that date is summarised below:
Liquidation
Quantity
Assets(Coins)Crypto Holdings
BTC
39.76
ETH
654.37
XRP
1,433,858.33
BNB
1,763.92
TRX
1,954,840.65
ADA
135,014.89
LTC
1,160.82
IOST
2,776,348
XEC
601,182,121.43
Sub-total
N/A
USD Bank Account
USD
N/A
Total
AssetsN/A

Est. value(BTC equiv.)

Est. value(USD equiv.)

%
Total

39.76
35.05
19.82
17.45
5.55
2.78
2.24
1.67
1.02
125.34894,180
788,241445,646
392,490
124,70762,53050,264
37,664
22,8452,818,566

25%
22%
12%
11%
3%
2%
1%
1%
1%
78%

35.26

792,98922%

160.603,611,555

100%

9.

The Liquidators gained access to the Torque Trading Accounts on 30 June 2021 andconsolidated the Crypto Assets that were held over the Main Binance Account and its
over 240 sub-accounts into the Main Binance Account on 9 September 2021 with thecooperation of Binance. Upon consolidation of the Crypto Assets, there were 67
different cryptocurrencies held in the Main Binance Account.

10.

The estimated USD216.8k equivalent in funds that were identified in the Liquidators’
Report as being held in the Cold Wallet Laptop were also consolidated into the Main
Binance Account with the support of Kroll’s Cyber Risk team on 22 October 2021.

11.

The Liquidators have made arrangements to be able to convert the Crypto Assets into
fiat currency and channel these funds to a fiat currency bank account. A USD bankaccount was opened with VP Bank on 10 December 2021 (the “USD Bank Account”).
An account was also opened on 6 January 2022 with Paxos (the “Paxos Account”),
which is a third-party fiat channel service provider, as an intermediary in processing
the conversions to USD.

12.

On 15 March 2022, the Liquidators began to convert coins that were of less significant
overall value to USD. There was an initial conversion of 26 coins amounting to justunder USD50k equivalent however some of the cryptocurrencies were not able to beconverted directly.

Page 4 of 913.

On 18 April 2022, there was a further conversion exercise undertaken to convert
cryptocurrencies of very low value by way of a specialised ‘convert dust’ function on
Binance designed for this purpose leaving only 11 different types of realisable
cryptocurrencies (ETH, BTC, XRP, BNB, TRX, ADA, LTC, IOST, XEC, BUSD and
USDT) remaining in the Main Binance Account. Not all coins were able to beconverted. For example conversion/realisation has not been possible for the SXP,DASH, LOOM and GAS balances and Binance had delisted DON and QISWAP ofwhich the balances would have been of negligible or nil value on conversion.

14.

Overall, USD3.0m equivalent of Crypto Assets have so far been converted to USD andtransferred to the USD Bank Account, from which USD2.2m has been paid in relation
to the Liquidators’ fees and expenses including legal and professional fees to date.
The transfers to the USD Bank Account were made on dates ranging from 25 January2022 (following the opening of the USD Bank Account and Paxos Account) up to today.
Over half of the transfers to the USD Bank Account were from existing crypto holdingsof UDST with the remaining balance up to USD3.0m requiring conversion of coins
other than USDT at an average BTC price of USD39,004.

15.

The value of Torque’s Crypto Assets has varied substantially since the appointment of
the Provisional Liquidators on 2 March 2021 (the “Appointment Date”). The price of
bitcoin for example, which represents 25% of Torque’s current Crypto Asset portfolio
and is positively correlated with the prices of a range of other cryptocurrencies, was
USD48,379 as of the Appointment Date, reached a high price of USD68,790 on 10
November 2021 (42% higher than as of the Appointment Date) and a low of
USD26,350 on 12 May 2022 (46% lower than as of the Appointment Date).

16.

The last reported estimated value of Torque’s Crypto Assets as of 5 May 2021
(Liquidators’ Report, Section E) was approximately 238.48 BTC or USD13.7m
equivalent based on the prevailing market prices of the cryptocurrencies at the timethat were held in the Torque Trading Accounts and Cold Wallet Laptop. The price of
bitcoin as of that date was approximately USD57,652 (19% higher than as of the
Appointment Date).

17.

The price of bitcoin as of 13 June 2022 was USD22,487 (54% lower than as of the
Appointment Date and 61% lower than on 5 May 2021, which is the valuation date of
the Crypto Assets at Section E of the Liquidators’ Report).

18.

In consideration of the substantial price volatility associated with cryptocurrencies, theLiquidators continue to convert the portfolio of Crypto Assets into USDT on a straightline basis over a 6-month period in order to obtain an average realisation price over areasonable period of time to mitigate the possible effect of the inherent risks of pricevolatility. The process of conversion began in April 2022 following consultation with the
Torque Ad Hoc Creditors’ Committee in a meeting held on 13 April 2022 and is
expected to be completed by November 2022.

Page 5 of 9

Personal Wallet Crypto Assets
19.

Torque’s Personal Wallet hosting was a separate service offered to Torque’s Users
that allowed Users to store crypto assets in a unique digital wallet address that wasowned by the individual User.

20.

On 24 June 2021, following the Order which confirmed the Liquidators’ conclusion thatthe crypto assets held in the Personal Wallets did not form part of the assets of theLiquidation, the Liquidators reactivated the functionality of the Personal Wallets,
allowing the owners of those Personal Wallets access to withdraw their cryptocurrency
assets.
Personal Trading Sub-Accounts

21.

The Liquidators received a total of five claims against ‘trust assets’ of the Company,
four of which have been rejected.

22.

To date, one such claim has been assessed as being a valid proprietary claim, where
the claimant provided sufficient evidence that certain Personal Trading Sub-Accounts
were created exclusively for the use of this individual pursuant to two agreements that
had been entered into with the onsite team in Vietnam of Snap Innovations Pte. Ltd.
The Liquidators entered into a settlement agreement dated 5 August 2021 (the“Settlement Agreement”) in respect of this claim to pay the amounts of 335,221.43
USDT, 3,988,474 DENT and 0.1268 BTC that were held in the relevant Personal
Trading Sub-Accounts (overall approximately USD350,630 equivalent as of the dateof the Settlement Agreement).
Subject to there being no further proprietary claims proven against the Crypto Assets,
the assets of the Company will be available to be shared amongst creditors ‘pari passu’(in equal proportions) less any further Crypto Assets that may be established as being
trust assets and remaining costs of the Liquidation.

C. Returns to Creditors
23.

There is now more certainty as to the estimated returns to creditors in the Liquidation.
Set out below is an update of estimated returns since the last estimate provided tocreditors:
Estimated Returns to Creditorson the Dollar
Trading Wallet Crypto Assets

24.

Virtual Town Hall
23 May 2021
Low
High
0.4c
1.8c

7th Circular Update
13 June 2022
Low
High
0.1c
0.9c

The indicative return to creditors of 0.1 to 0.9 cents on the dollar assumes:
24.1

assets of the Company of total estimated value in the range of USD2.8m to
USD6.5m based on a range of closing prices of bitcoin from USD22,487 per
BTC (which was the closing price on 13 June 2022, and also the lowest of all

Page 6 of 9

closing prices over the past twelve months) to USD45,000 per BTC which isjust over the average price of bitcoin for the past twelve months, after thepayment of USD2.2m in Liquidators’ fees and expenses, including legal costs;
24.2

no recoveries from the Planned Recovery Actions that the Liquidators intend to
take however realisations from the pursuit of legal claims will provide a higher
return to creditors;

24.3

ongoing Liquidators and professional and legal fees and expenses; and24.4

whilst the Liquidators have rejected various trust claims based upon
information provided to date, these parties are not prevented from taking further
steps which may substantiate and validate their claims.

25.

Following consultation with the Torque Ad Hoc Creditors’ Committee in a meeting held
on 19 October 2021, the Liquidators will distribute the proceeds of the Liquidation in
cryptocurrency. This is to minimise the substantial cost with payments in fiat currency
associated with transfer charges for such a large volume of transactions. Payments in
USDT via Binance will enable the Liquidators to substantially reduce conversion costs.
For the sake of clarity, distributions will be made in USDT only and there will not be
any distributions made in fiat currency.

26.

The Liquidators intend to make a partial interim dividend to creditors in Q4, 2022. Given
on-going litigation matters and price volatility, the Liquidators will review the position in
Q3, 2022 and provide a further update to creditors in this regard in due course.
Creditor Claims Submission Portal

27.

Permission has been granted by the BVI Court by way of the Order to utilise an online
Proof of Debt Form acceptable to the Liquidators to enable creditors of the Company
to electronically submit claims in the Liquidation of the Company (the “Claims Portal”).

28.

Adjudication of creditor claims via the Claims Portal will materially reduce the costs ofadjudication which otherwise would require substantial man hours and cost to compile
and review more than 14,000 claims and will allow for the automation of Know Your
Customer (KYC) and Anti-Money Laundering (AML) screening to produce further
savings in costs and in terms of the Liquidation timeline.

29.

The development of the Claims Portal is in the final stages and will be launched in Q3,
2022. An email will be circulated to all creditors at the appropriate time to provide
instructions on how to submit claims in the Liquidation via the Claims Portal. Details
will also be made available on the Torque website.

30.

Creditors who intend to claim in the Liquidation are advised to prepare for lodgment ofclaims in the following way:
30.1

provide the Liquidators with your updated email contact details (if necessary);
andPage 7 of 9

30.2

31.

take a screenshot of your Torque Account Username and Trading Wallet
Balances via either: (i) the Torque website at: https://torque.asia/; or (ii) the
Torque mobile application. Detailed instructions of how to do so are included
at Annexure B of this 7th Circular.

Although the screenshot of your Trading Wallet Balances and Username would not be
required in the event that your claim is automatically matched with the records of theCompany through the process of the Claims Portal (which will be the majority of cases),in the event that any creditor may not agree with the Company records, the screenshotof the Trading Wallet Balances would be a key factor in substantiating any claim thatmay differ from the Company records.
Please note that the Torque Trading website is scheduled to be shut down nolater than 30 September 2022 and it will not be possible to capture thescreenshot after this date.

D.

Liquidation Timeline

32.

The Liquidators plan to commence legal proceedings to recover further assets, vis-àvis the Planned Recovery Actions, and consequently the Liquidation will take at leasta further 12 to 18 months to complete. It should be noted that if legal proceedings arecontested, such proceedings can take anywhere up to two to three years to beresolved, excluding any appeals.

33.

An interim and possibly final dividend is likely on the basis that costs associated with
the Planned Recovery Actions are able to be reasonably estimated. A partial interim
dividend is expected to be paid before the end of the year. It will take an estimatedthree to five months from the date of this 7th Circular to be distributed to Torquecreditors, this is on the basis of a further one to two months for opening of the Claims
Portal and two to three months for adjudication of creditor claims and Court sanction(s).

E. Liquidators’ and Other Fees
34.

The Liquidators continue to ensure that all costs of the Liquidation remain atreasonable levels by: (i) planning and monitoring their work and staffing, (ii) preparing
and monitoring budgets for their own work, and (iii) regularly reviewing and adjusting
their work focus and staffing.

35.

The Liquidators have ensured that throughout the Liquidation the value of the services
rendered are proportionate to the value and nature of the assets involved, thecomplexity of the liquidation and the responsibilities involved in dealing with the affairsof the Company. The Liquidators have supervised and managed team members' tasks
and have taken all necessary steps to avoid unnecessary duplication, ensure correct
staffing levels, and to ensure that work is undertaken by staff of the appropriate levelof experience.

Page 8 of 9

36.

37.

The BVI Court has approved payment of USD2,177,176 in respect of the Liquidators’fees and disbursements and professional and legal fees incurred from the date of
appointment of the Provisional Liquidators to 15 October 2021 as follows:
36.1

Liquidators’ fees in the amount of USD1,470,800, representing an interim
payment of 80% of the fees incurred by the Liquidators form the date of
appointment to 15 October 2021;

36.2

100% of out-of-pocket expenses incurred in the amount of USD5,199; and36.3

100% of professional and legal fees in the amount of USD701,177.

A detailed breakdown of the BVI Court approvals in relation to the costs of theLiquidation are set out in the table below:
BVI Court Approved Costs of the Liquidation

USD

Liquidators’ Fees and Disbursements for the period
from 2 March 2021 to 15 October 2021
Out-of-Pocket Expenses
Professional and Legal Fees
Total
Approved Payment*
Unpaid Balance

1,838,500.50
5,198.82
701,177.10
2,544,876.42
2,177,176.32
367,700.10*The BVI Court has approved the Liquidators’ fees as presented, in addition to professional and legal fees, and out-ofpocket expenses with 80% payable immediately. The final fee approval at the end of the Liquidation will confirm thetotal amount payable.

38.

A further fee application for approval of fees in the amount of USD777,994 for costs
incurred to 28 February 2022 will be submitted to the BVI Court for approval in July
2022.

39.

Based on the current workstreams, in particular intention to pursue the Planned
Recovery Actions, the Liquidators anticipate further costs in the range of USD1.5m to
USD2.0m.

40.

The Liquidators will continue to provide updates to creditors as and when recoveries
are made.

Page 9 of 9F.

Contact Details

Should you have any queries or require further information, please contact myself or Kent
McParland. Our contact details are set out below:

Kroll
Office BVI
Office SG
Email: +1 284 393 9300
: +65 6327 1211
: bw-torque@kroll.com

Yours faithfully,

Jason Kardachi
Joint Liquidator
Annexures:(A) Order of the BVI Court dated 25 May 2021.
(B) Torque Group Holdings (In Liquidation) – Taking a Screenshot of your Torque
Account Username and Trading Wallet BalancesAnnexure A

Torque Group Holdings Limited(In Liquidation)
Taking a Screenshot of your Torque Account Username and Trading Wallet Balances

1. Via Torque Website

Step 1. Visit the Torque Website• Go to https://torque.asia/• Click “LOGIN” in the top right-hand corner.

3

Step 2. Log in to your user account• Enter your Torque Username and Password, and press “SIGN IN”.

4

Step 3. Screenshot Trading Wallet Balance and Username• Proceed to your Dashboard using theicon in the banner at the top of the screen.

• Click Dashboard to view your wallet balances.
• Take a full page screenshot which clearly displays (1) your Torque Username and (2) all Trading Wallet Balances you wish to
submit your claim for.
1. Username

2. Trading Wallet Balances

5

Step 4. Save your screenshot• Please save a copy of your screenshot as an image file (e.g. JPEG, PNG) or PDF.
• You can use this document later as supporting evidence for your claim in the liquidation of Torque Group Holdings
Limited (In Liquidation).
• Once you receive your email invitation to submit your claim in the liquidation, the Liquidators will require you to upload
this image file / PDF in support of your claim as part of your claims submission process via the Kroll Creditor Claims
Portal.

2. Via Torque Mobile Application

Step 1. Log in to your user account• Open the “Torque” app.
• Enter your Torque Username and Password, andpress “LOGIN”.

Step 2. Screenshot your Username• On the home screen, take a full page screenshot
which clearly displays your Torque Username.

UsernameStep 3a. Screenshot your Trading Wallet Balances• In order to access your Trading Wallet balances, press the“Trading Wallet” balance on your “Home” screen.

Balance

Press forTrading
WalletBalances

Step 3b. Screenshot your Trading Wallet Balances
Ensure that your claim is for
Trading Wallet balance
only, not Personal Wallet.

• Once on the Wallet page of the Torque application,
ensure that you are viewing your Trading Walletbalances and not your Personal Wallet balances.
• Take a full page screenshot(s) which clearly displays
all crypto asset balances in your Trading Wallet thatyou wish to submit a claim for.
• Please ensure that all crypto balances you wish to

Balancesubmit a claim for are clearly visible in yourscreenshot(s).

Balance

Balance
Balance
BalanceTakescreenshot(s)for all Trading
Walletbalancesyou wish to
claim for.

Step 4. Save your screenshot• Please save copies of your screenshot(s) as image files (e.g. JPEG, PNG) or PDF.
• You can use this document later as supporting evidence for your claim in the liquidation of Torque Group Holdings
Limited (In Liquidation).
• Once you receive your email invitation to submit your claim in the liquidation, the Liquidators will require you to upload
the image file(s) / PDF(s) in support of your claim as part of your claims submission process via the Kroll Creditor
Claims Portal.

For more information, please contact:

Kroll
BVI Office:Singapore Office:
Email:+1 284 393 9300
+65 6327 1211
bw-torque@kroll.com

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