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ARTICLE · 17 OCTOBER 2023

Crypto Meets Bankruptcy: Developments, Risks, And Concerns

Carter Ledyard & Milburn LLP
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While perhaps inevitable that the largely unregulated cryptocurrency industry would become acquainted with the world of bankruptcy court, that intersection has certainly occurred.

United StatesInsolvency/Bankruptcy/Re-Structuring
Guy Ben-Ami
Guy Ben-Ami
Matthew D. Dunn
Matthew D. Dunn
Aaron Cahn
Aaron Cahn

While perhaps inevitable that the largely unregulated cryptocurrency industry would become acquainted with the world of bankruptcy court, that intersection has certainly occurred. After facing a series of challenges and much scrutiny in recent years, the crypto industry experienced several high-profile bankruptcies in 2022. These bankruptcies have highlighted the unique risks faced by cryptocurrency holders and investors, as well as the importance of understanding bankruptcy procedures and priorities. Most of these cases were commenced within the past year, and thus there remain many issues unique to crypto that have not been resolved. Despite there being unanswered questions and lack of clear guidance from the courts on certain issues, this article discusses some of the legal issues and concerns that bankruptcy has brought to the fore and that anyone considering investing in cryptocurrency should be aware of.

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