The Eastern Cape High Court (East London) has ruled that the Rawlins Trust, which received about R300m from 991 individuals to invest in high-risk cryptocurrency – and reportedly lost up to R120m in the process – must be finally sequestrated.

A Daily Dispatch report says Judge Bantubonke Tokota found that a notice signed by all the trustees that the trust was unable to pay lawyer and investor Russel Linde constituted an act of insolvency and had been a legally acceptable trigger for the sequestration process in September 2020.

The written acknowledgment of the trust’s indebtedness also fixed Linde’s claim, despite argument that cryptocurrency was highly volatile and could not be a liquid claim.

The allegation by Richard and Marise Rawlins that they had signed the notice under duress was contrived and far-fetched, the judge said.

It was also clear that Linde was an investor in the scheme.

Tokota rejected the argument that Linde ought to have waited five days to receive his money, saying he had not signed such an agreement.

Tokota said none of the legally accepted signs of duress – that the fear of an imminent and illegal evil would be brought to bear on the Rawlins couple if they did not sign the notice – had been shown to be present.

‘Duress or intimidation cannot be established by a mere say-so. Something more is required. In my view there is no evidence that the Rawlinses were subjected to any pressure when they signed the notice.’

The Daily Dispatch report says regarding the claim that the trust was a fraudulent Ponzi scheme, the judge said while Richard Rawlins disputed this, ‘there is reason to suspect the genuineness of the establishment of the trust’.

On the absence of a written resolution authorising the Rawlins couple to oppose the sequestration, Tokota said the couple had made this decision at a trustee meeting.

To insist on the written resolution would be to require form over substance, he said.

Full Daily Dispatch report (subscription needed)