Home Banking & Finance Tarrytown digital currency venture declares bankruptcy

Tarrytown digital currency venture declares bankruptcy

A digital currency company based in Tarrytown has filed for bankruptcy protection. Hampstead Global LLC, whose sole asset is Coins.com, filed a Chapter 11 petition March 30 in federal bankruptcy court in White Plains.

digital currencyOwner Adam Perzow attributed the financial problems to unwillingness by the largest creditor to extend payment terms or settle legal claims, and to large market swings and significant declines in the value of digital currencies.

Perzow acquired the Coins.com domain last year from Stack’s Bowers Numismatics, a rare coins auctioneer in Santa Ana, California. The bankruptcy petition lists a $1.3 million loan from Stack’s Bowers as the largest unsecured claim, but characterizes it as disputed.

Perzow said in a July interview published on the Inside Interview blog that he buys domain names and builds them into broader mainstream brands. His strategy for Coins.com was to create a platform for digital currencies – such as online gaming coins – for the mass market, and cryptocurrencies – such as Bitcoin – for a niche market.

Perzow declared $448,000 in unsecured claims, not including the disputed Stack’s claim. He estimated the value of the domain at $3 million to $5 million, and states legal claims against Stack’s Bowers are worth $500,000 to $1.5 million.

Coins.com is being held in escrow, according to the petition, and the site is static.

Hampstead uses independent contractors to develop a currency and the digital platform, the petition states. It has no employees, equipment or buildings, but it has an office in Tarrytown, a mailing address in Scarsdale and uses an address in Santa Monica, California.

Hampstead has not previously filed for bankruptcy, the petition states, but another company controlled by Perzow has done so.

Heath Global Inc. filed for Chapter 11 reorganization in 2012 in Manhattan, declaring $4 million in assets and more than $2 million in liabilities.

Heath Global agreed to buy the Invest.com domain from Jim Magner of Kilkenny, Ireland, for $2 million in 2011. It still owed more than $1.9 million when it filed for bankruptcy.

In 2014, under bankruptcy court supervision, Magner granted Perzow an option to buy the domain for $2.5 million.

Perzow persuaded Israeli venture capitalist Moshe Hogeg to invest in the site. Perzow claims that the deal had two parts: Hogeg would finance the $2.5 million payment to Magner and then both men would build out the site and run it as a joint venture.

But after Hogeg gained control of the domain, Perzow claims in a lawsuit filed last year in Los Angeles Superior Court that Hogeg implemented Perzow’s ideas but cut Perzow out of the business.

“Perzow’s dreams for Invest.com,” the complaint states, “had become a nightmare.”

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