The bankruptcy court presiding over the FTX Trading bankruptcy last month issued a memorandum opinion addressing valuation of cryptocurrency-based claims and how to “calculate a reasonable discount to be applied to the Petition Date market price” for certain cryptocurrency tokens.
"The law on 'knowing receipt' has perplexed judges and academics alike for several decades" – Lord Burrows (paragraph 99).
Who owns cryptocurrency held by a cryptocurrency exchange? Do the cryptocurrency assets belong to the customers who deposited the crypto with the exchange, or do the cryptocurrency assets belong to the exchange itself? The answer to this question will have huge significance, both in terms of creditor recoveries as well as preferential transfer liability exposure.
In this second part of our blog exploring the various issues courts need to address in applying the Bankruptcy Code to cryptocurrency, we expand upon our roadmap.
Many authorities and commentators have considered cryptocurrencies, and the blockchains that undergird them, as a potentially disruptive force in the financial industry. Now, that disruption has made its way to a different side of finance—bankruptcy, and during the past year, the United States bankruptcy courts have had to confront many unexpected challenges involved in dealing with cryptocurrency.
Judgment creditors should be aware that the English Court of Appeal has given guidance on the proper construction of s423 Insolvency Act 1986 (transactions defrauding creditors)1.
On August 17, 2023, China Evergrande Group, one of China’s largest real estate developers, and its affiliates filed chapter 15 petitions in the US Bankruptcy Court for the Southern District of New York in Manhattan seeking recognition of foreign restructuring proceedings in the High Court of Hong Kong and in the High Court of the Eastern Caribbean Supreme Court in the British Virgin Islands.
How close is too close? The answer to this question can have dire implications for people and companies involved in the cannabis industry who wish to seek bankruptcy protection.
Globalisation means that the effects of a business entering insolvency proceedings rarely stay within the territorial confines of a single jurisdiction; one need only look to the recent cryptocurrency bankruptcies as evidence of this. Cross-border insolvencies are no longer the preserve of large multinational corporation failures. Globalisation and the advent of digitisation mean that even small enterprises have customers, assets, and suppliers in multiple countries. This is particularly so across Asia.