ProCap Newsletter No. 69

Dear Clients,

In our previous update, we explained why developments concerning the same or connected investment operation in another country may be relevant to the ProCap case, while not automatically producing the same legal consequences in every jurisdiction.

This week, we would like to address another important distinction in international investment fraud cases: identifying the individuals or entities involved does not necessarily mean that the lost funds can immediately be recovered.

These are related, but legally and practically separate issues.

Identifying the persons behind an investment operation

One of the important objectives in an investment fraud investigation is to establish who was involved and what role particular individuals or companies may have played.

This may require examining corporate structures, bank accounts, payment processors, cryptocurrency transactions, communications with investors and other available evidence.

In international cases, different individuals or entities may have performed different functions. The persons who communicated directly with investors may not necessarily be the same persons who controlled the companies, received the funds or ultimately benefited from them.

Establishing these connections can therefore require significant investigative work.

Finding the responsible persons does not automatically mean finding the money

Even where individuals connected with an investment operation are identified, a separate question remains: where are the funds?

Money transferred by investors may have passed through several bank accounts, companies, payment providers or cryptocurrency wallets before reaching its final destination.

By the time an investigation progresses, funds may have been transferred again, converted into other assets or moved across different jurisdictions.

For this reason, identifying a person potentially connected with the operation does not automatically establish that recoverable assets remain under that person’s control.

Why tracing the flow of funds matters

Financial records can help establish the path taken by investors’ money.

Bank transfer confirmations, recipient account details, cryptocurrency transaction records and information concerning payment intermediaries may all contribute to reconstructing that flow.

This is also why documentation relating to individual investments remains important even after a significant period of time has passed.

When information from different transactions and investors is considered together, it may help identify common recipients, accounts or other connections that would not necessarily be apparent from a single transaction.

What is required for an actual recovery of funds?

The existence of identifiable assets is only one part of the process.

For funds or other property to ultimately be returned to victims, there must also be an appropriate legal basis and procedure through which those assets can be secured and distributed.

Depending on the circumstances, this may involve criminal proceedings, asset seizure or confiscation, insolvency or receivership proceedings, civil proceedings or another legally established recovery mechanism.

This is why reports that an individual has been identified, arrested or charged should not automatically be interpreted as confirmation that victims will receive their money back.

At the same time, such developments may still be important because they can lead to additional information about the operation, financial flows and potentially identifiable assets.

What does this mean for ProCap investors?

At present, there is no new official development requiring action from our clients.

We continue to follow relevant information concerning ProCap and any developments that may be significant for establishing responsibility, tracing funds or assessing potential recovery options.

If we receive verified information that changes the status of the case or requires additional documentation or action from you, we will inform you accordingly.

Understanding the distinction between identifying those responsible, tracing the funds and actually recovering assets is important when assessing developments in complex international investment fraud cases. These stages may be connected, but they do not necessarily occur at the same time.

Thank you for your continued patience and trust.

Kind regards,

Attorney Zoran Miljaković