Legal Recourse

Level 1

If merchant falls into default, whether because they choose not to remit yield as required, or because they violate an operating covenant, 3Jane will first work with merchants on a friendly basis to get merchants back on track. Whether it be making payments or realigning portfolio positioning, situation specific.

Level 2

However, should amicable outreach not be successful, 3Jane reserves the right to declare events of default, which may in turn develop into an acceleration of the balance owed. In this event, 3Jane would have all rights and remedies as would any other creditor. At the time of first funding, 3Jane takes a security interest against the yield it is purchasing via the parties’ signed agreement, as well as perfects said interest by filing a UCC-1, such that should there be a default that goes uncured, pursuant to Article 9 of the UCC, 3Jane would be within its rights to seize such onchain assets to pay down the account balance owing to 3Jane. Funds may be recovered from stablecoin issuers, CEXs, and, if necessary, through a court order compelling the wallet holder to disclose or use the private key to repay (level 3).

Level 3

3Jane would also be within its rights to pursue the merchant through traditional methods, including arbitration or court proceedings. Should 3Jane be awarded a judgment, 3Jane would seek to enforce its judgment against any and all assets of the merchant, consistent with applicable U.S. state law. This may include DeFi, CEX, bank, and brokerage assets.

DeFi Advance Agreement: https://drive.google.com/file/d/1oVYpnAI4L82_tLI-TT92RsnLZHepZr8O/view?usp=sharing

Non-Performing (NPCL) Auction

At the start, 3Jane will attempt collection in-house.

After +60d, depending on the ticket size 3Jane may choose to continue to attempt collections in-house or alternatively initiate an auction.

3Jane initiates an onchain dutch auction for licensed U.S.-based collections agencies to bid on collecting the debt on a contingency basis, meaning if they are successful in collecting they get to keep a share of the principal repaid. The lifecycle is as follows:

1. Auction is triggered by delinquency and 3Jane shares merchant profile with all onboarded collections agencies, including onchain/offchain credit data, assets, and cash flows. Does not include PII

2. The contingency rate Rc increases over time until an agency accepts. 3Jane shares private user data with the particular collections agency

3. Agencies proceed to collect on the debt via skip tracing (TLOxp). These agencies have multiple means of incentivizing repayment, including getting a court injunction to force repayment and subsequent wage garnishment, bank account levies, CEX levies, and freezing onchain assets.

4. If successful, merchant directly repays outstanding balance onchain. Funds redistributed to money market, collections agency, and existing merchant.

TLOxp is a powerful skip tracing and debt recovery tool that equips licensed collections agencies with 100 billion public and proprietary data points that helps agencies locate debtors and verify identities.