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Unsuccessful Closing & Capital Return Constraints ​

Treat a fund close as unsuccessful when the target deadline, permitted withdrawal, or a regulatory or compliance halt prevents successful closing. The normal, failure, and recovery sequence is Cancel, recover, and hand off work.

Failure criteria ​

An unsuccessful closing can result from:

  1. The deadline passing without the minimum target being met.
  2. An Issuer withdrawal permitted by the fund terms.
  3. A regulatory or compliance halt.

The Issuer or Administrator records the trigger, decision authority, fund status, affected Investments, and the applicable rule or fund term. When failure is confirmed, new subscriptions stop and pending Subscription Agreements are voided.

See the fund status lifecycle for technical states.

Capital return constraints ​

When a contingent closing condition is not satisfied, the qualified custodian or other settlement owner must promptly return the full principal to the Investors. No fees are deducted, and the Issuer has no claim to the funds. Refunds go only to the originating bank account or originating crypto wallet. The platform must not redirect a refund to a third-party destination.

No return is complete until the owning service records the provider or chain result. A cancellation request, refund instruction, pending state, and completed return remain distinct records.

See Investment Cancellation for the originating-source refund policy.

Investor notice and records ​

The Issuer or Administrator notifies affected Investors of the failure and reason. The notice states that no funds reached the Issuer and provides available return timing information. The record preserves:

  • The minimum target, deadline, and failure decision.
  • The list of refunded Investors and their Investment status results.
  • The escrow or custody instruction, originating payment source, provider response, and return confirmation.
  • The escrow release timestamp, notification delivery, audit evidence, and any recovery handoff.

See SEC Rule 15c2-4, Reg CF Rule 304, and FINRA Rule 4511 where applicable. The responsible compliance owner determines the applicable retention period and records that the Issuer did not receive funds before the permitted release.

See Fund Cancellation and Investment Cancellation for related constraints.