Cryptocurrency has been recognized as “property” for the purposes of the Bankruptcy and Insolvency Act by the Ontario Superior Court of Justice (Commercial List) in Re Quadriga Fintech Solutions Corp. et al.,[1]the first Canadian case of its kind.
On May 11, 2020, the Federal Trade Commission (FTC) announced a proposed settlement with the operator of a deceptive crowdfunding scheme—Douglas Monahan, who operated iBackPack of Texas—for raising money to develop a high-tech backpack and other products and then failing to deliver any of the products and instead using the funds for himself.
The advertising campaign claimed that the company was working on a backpack that incorporated various technology components, including batteries for charging laptops and cellphones, cables, and a Bluetooth speaker.
Status Of Crypto-Assets Under English Law
The definition of ‘property’ in section 436 of the Insolvency Act 1986 is considered by many to be wide enough to be inclusive of crypto-assets, and recent developments in this jurisdiction also support the position that crypto-assets constitute property under English law.
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COVID-19: LEGAL & REGULATORY CHANGES
CORPORATE INSOLVENCY AND GOVERNANCE ACT 2020 IN FORCE
Lexology Pro Compliancetakes a look at some of the most informative articles published on Lexology this fortnight for compliance teams to stay up-to-date, including key guidance from regulators around the world and practical tips to help businesses adapt to a new normal.
Especially in view of the crisis resulting from the Coronavirus pandemic, the question arises: What happens to tokens in insolvency, especially if they are held in safekeeping by a service provider for his customers?
1 Foreword Simon Croall QC 2 Using Force Majeure Clauses in Relation to Inability to Pay: A Forlorn Hope?
On Wednesday, November 18, two customers of Cred Inc., a cryptocurrency investment platform currently in Chapter 11, asked Delaware Bankruptcy Judge John T. Dorsey to convert the Chapter 11 case to a Chapter 7 liquidation (or, in the alternative, to appoint a Chapter 11 Trustee “with expertise in hunting down . . . stolen cryptocurrency”). Prior to its Chapter 11 filing, Cred received investor-cryptocurrency, typically in the form of loans, and then purportedly used those funds across a variety of investments to generate favorable returns.
The new set of Swiss laws on blockchain and distributed ledger technology (DLT; Blockchain/DLT Laws) has been approved by the Swiss Parliament on 25 September 2020 and is thus now in final form. Subject to a referendum, which is unlikely, the Blockchain/DLT Laws will presumably enter into force early next year.
The main topics of the Blockchain/DLT Laws are:
This article by Jeremy Richmond QC and Chris Recker of Trowers & Hamlins was first published in International Corporate Rescue by Chase Cambria.
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