Crypto And Blockchain In M&A: How To Address Issues Around Volatility, Validity And Valuation

Given the amount of wealth accumulated in cryptocurrency form, it was only a matter of time before we saw disruption in M&A and other corporate transactions. The current downturn has emphasised the volatility of these instruments, but not wiped out their value. We are continuing to see crypto being used in corporate transactions - perhaps because holders wish to put the residual value to use, with the lure for the investee businesses that a later boost in value will be to their benefit.

As early as 2013, two companies were purchased using Bitcoin. Historically, the use of cryptocurrencies in M&A to settle the purchase price has been limited to fintech and crypto sector deals. There are signs this trend is spreading to a wider range of transactions with the value of crypto-funded M&A deals doubling over the last couple of years. But there are a number of legal considerations to bear in mind.