Cryptoassets continue to be in the spotlight with prices no longer heading ‘to the moon’, the recent high-profile failure of an algorithmic stablecoin and the difficulties experienced by various service providers. This all forms the backdrop to the UK Government’s publication of proposals with respect to managing the failure of systemic digital settlement asset firms.

Overview

Much Anticipated Extraterritoriality Ruling Could Have Far-Ranging Implications

District Court decides that in a broker-dealer liquidation governed by SIPA, where a trustee seeks to recover funds paid to the defendant under Sections 548(a) and 550(a) of the Bankruptcy Code, which impose liability for fraudulent conveyances where the defendant lacked good faith in receiving the funds: (i) the defendant’s good faith is evaluated under a subjective willful blindness standard, and (ii) to survive a motion to dismiss, the trustee bringing the fraudulent conveyance claims must plead facts sufficient to establish the defendant’s lack of good faith.