Falling cryptocurrencies (bitcoins, dogecoins, shiba coins, binance coins and other) Credit: Igor Faun/Shutterstock.com Preference Due Diligence in the Crypto Winter
This article considers how the due diligence language added to Bankruptcy Code §547(b) might be applied to potential preference claims in a cryptocurrency bankruptcy case.
September 16, 2022 at 02:10 PM
8 minute read
Cryptocurrency
Sections 547(b) and 550 of the U.S. Bankruptcy Code allow a debtor to claw back certain payments made to non-insiders in the 90 days prior to the bankruptcy filing and to insiders in the year prior. The Small Business Reorganization Act of 2019 raised the bar on the due diligence needed to pursue such litigation, requiring the debtor assess "known or reasonably knowable affirmative defenses" before moving forward. The following analysis considers how the due diligence language added to §547(b) might be applied to potential preference claims in a cryptocurrency bankruptcy case.
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