In BVIHC(COM) 2022/0119, Russell Crumpler and Christopher Farmer as Joint Liquidators of Three Arrows Capital Ltd (in liquidation) -and- (1) Zhu Su (2) Kyle Davies
The BVI Court has endorsed what is believed to be its first extra-territorial order summoning directors of a BVI company (in liquidation) to appear for private examination by joint liquidators.
From television commercials to naming rights for arenas, the topic of cryptocurrency has been hard to avoid. While cryptocurrency may be virtual, its creation or ’mining’ occurs in the real world. This mining poses a credit risk for utility companies, given the incredible amount of electricity required to operate a “mining” facility. For example, crypto mining company Core Scientific, Inc. and its related companies, recently filed Chapter 11 bankruptcy cases where they reported their average monthly utility bills were more than $24.5 million dollars.
In BVIHC(COM) 2022/0119, Russell Crumpler and Christopher Farmer as Joint Liquidators of Three Arrows Capital Ltd (in liquidation) -and- (1) Zhu Su (2) Kyle Davies
The BVI Court has endorsed what is believed to be its first extra-territorial order summoning directors of a BVI company (in liquidation) to appear for private examination by joint liquidators.
From investors to regulators, FTX Trading Ltd (FTX) filing for bankruptcy was unexpected by all. A catalyst for litigation and regulation over the years to come, this collapse will serve as a warning, particularly to cryptocurrency insurers.
What happened?
Demand for virtual currency services, including custody services, has soared in the past several years. Like their counterparts in traditional finance, these custodians are stewards of retail and institutional customer funds and serve an important and valuable function. However, as evidenced by a number of headline-grabbing failures during the lingering crypto winter, inadequate disclosures and poor custodial practices can seriously harm retail and institutional customers alike.
The Society of Trust and Estate Practitioners (STEP) held its annual International Wealth Structuring Forum in the Cayman Islands on 19 and 20 January 2023 at the Ritz-Carlton, Grand Cayman. The forum was an opportunity for leading trust and wealth management professionals to gather and discuss the latest local and international developments impacting the industry. Hector Robinson KC and James Anson-Holland of Mourant attended the forum and have summarised the top three takeaways from the panel discussions.
The mercurial modern assets
The concept of “property of the estate” is important in bankruptcy because it determines what property can be used or distributed for the benefit of the debtor’s creditors. Defined by section 541 of the Bankruptcy Code, “property of the estate” broadly encompasses the debtor’s interests in property, with certain additions and exceptions provided for in the Code. See 11 U.S.C. § 541. Difficult questions can arise in a contractual relationship between a debtor and a counterparty about whether an entity actually owns a particular asset or merely has some contractual right.
In a provocative demonstration that it scrutinizes all types of transactions, no matter their origin, the Committee on Foreign Investment in the United States (“CFIUS”) has reportedly been vetting the proposed $1 billion sale of bankrupt crypto lender Voyager Digital’s assets to Binance.US. Voyager Digital filed for Chapter 11 bankruptcy in July 2022, and, after an initial agreement to sell its assets to FTX crumbled, Binance.US provided Voyager Digital with the winning offer for its assets in December 2022. But, after the sale’s announcement on December 30, 2022, the U.S.
In 2022, there were several high-profile crypto bankruptcy filings. A big question in these cases is whether there will be any money to satisfy unsecured creditor claims. If there are funds to distribute, then the creditors’ claims will become more valuable, and the cases will become even more interesting.
Earlier this month, the SDNY Bankruptcy Court answered one of the gating questions at the center of Celsius Network’s Chapter 11 bankruptcy regarding the ownership of the approximately $4.2 billion in crypto assets.