VIRGINIA BEACH, Va. — Virginia Beach is filing a claim to get money back from a Bitcoin company that received a grant from the city.
The company, Bcause LLC, filed for Chapter 11 bankruptcy earlier this year. On Tuesday, a federal judge ruled that the filing would be converted to Chapter 7 bankruptcy.
Because of the change, Bcause no longer will attempt to restructure and continue to operate, which Chapter 11 allowed it to do. Instead, the company has to liquidate all assets, stop all operations, and lay off remaining staff members.
Bcause billed itself as "building the world’s first full-stack cryptocurrency ecosystem, which will include a digital mining facility, spot market, regulated derivatives exchange and clearing house."
The Virginia Beach Development Authority gave Bcause $500,000 in an Economic Development Investment Program (EDIP) award in January 2018.
Prior to its initial bankruptcy filing, Bcause received 87% of that money which comes out to $436,823.
A spokeswoman for the city said that the company had not made staff members aware of the change in status of the bankruptcy case. Upon hearing about the switch from Chapter 11 to Chapter 7, she said that the will file a claim to recoup money that it paid out to Bcause.