It’s no secret that the Government is looking for the UK to become a leader in the crypto market while increasing its regulation. This balancing act will become even more prevalent in the English courts over the next couple of years when it comes to restructuring and insolvency.
The European Markets in Crypto-Assets Regulation (Regulation (EU) 2023/1114 – MiCA), which entered into force on 29 June 2023, is a significant new regulation that will impact the treatment of cryptocurrencies and digital assets. MiCA requires the European Securities and Markets Authority (ESMA) to develop a series of regulatory technical standards (RTS) and implement technical standards (ITS) and Guidelines. Many of these regulations are to be developed in close cooperation with the European Banking Association (EBA).
On June 27, 2022, Three Arrows Capital (“3AC”), a crypto hedge fund, commenced liquidation proceedings in the British Virgin Islands and thereafter filed recognition proceedings in, among other countries, the United States and Singapore.
The Insolvency (Cross Border Insolvencies) Regulations 2014 (“the ICBIR”) provides an effective mechanism for dealing with cases of cross-border insolvency. It gives effect to the provisions of the UNICITRAL Model Law and also the EC Insolvency Regulations, which Gibraltar continues to apply in full even post Brexit.
It is no secret anymore that the MiCA (Markets in Crypto-Assets Regulation) is coming. But why is this important for insolvency practitioners and clients? This update aims to give an answer to this question and to provide an outlook on how the German legislator plans to implement these principles.
Until recently, the nature of ownership of assets on deposit with a third party was not controversial. If a local bank branch goes bankrupt, the cash or other assets deposited with the bank belonged to individual depositors/customers, safely out of the reach of the bank’s creditors, reinforced by numerous federal and state regulations, and bankruptcy case law.
But what happens if the asset that’s been deposited is cryptocurrency, held by a third-party, non-bank custodian?
The European Markets in Crypto-Assets Regulation (Regulation (EU) 2023/1114 – MiCA), which entered into force on 29 June 2023, is a significant new regulation that will impact the treatment of cryptocurrencies and digital assets. MiCA requires the European Securities and Markets Authority (ESMA) to develop a series of regulatory technical standards (RTS) and implement technical standards (ITS) and Guidelines. Many of these regulations are to be developed in close cooperation with the European Banking Association (EBA).
On June 27, 2022, Three Arrows Capital (“3AC”), a crypto hedge fund, commenced liquidation proceedings in the British Virgin Islands and thereafter filed recognition proceedings in, among other countries, the United States and Singapore.
It is no secret anymore that the MiCA (Markets in Crypto-Assets Regulation) is coming. But why is this important for insolvency practitioners and clients? This update aims to give an answer to this question and to provide an outlook on how the German legislator plans to implement these principles.