Kharkov, Ukraine – February 2, 2022: Celsius CEL coin symbol. Trade with cryptocurrency, digital and virtual money, mobile banking. Hand with smartphone, screen with crypto icon close-up Crypto Goes Bankrupt: What Do Lawyers and Investors Need To Know?
This article explores questions and potential intercreditor issues surrounding two crypto-related bankruptcy cases.
September 16, 2022 at 02:00 PM
8 minute read
Creditors' and Debtors' Rights
In an eerie case of foreshadowing for the crypto market, crypto exchange Coinbase Global disclosed in its first quarter 10-Q filing with the U.S. Securities and Exchange Commission that crypto held for its customers' accounts potentially could become property of a bankruptcy estate—and its customers treated as unsecured creditors—should the exchange file for bankruptcy. SEC Chair Gary Gensler echoed this concern a few days later: "If the platform goes down, guess what? You just have a counterparty relationship with the platform. Get in line in bankruptcy court."
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