Digital assets may be new, but existing English insolvency laws and principles can deal with them. So finds the UK Jurisdiction Taskforce (UKJT) in its ‘Legal Statement on Digital Assets and English Insolvency Law’, published this week.
Key takeaways include:
The Legal Statement applies areas of insolvency law to digital assets, providing valuable guidance on the approach English courts will take.
On 28 March 2024, the BVI Court granted the Joint Liquidators of Three Arrows Capital Ltd (in liquidation) ("3AC") sanction to make an interim distribution of up to US$100 million of 3AC's assets to its creditors in BVIHC(COM)2022/0119 Russell Crumpler and Christopher Farmer (as Joint Liquidators of Three Arrows Capital Ltd (in Liquidation)) v Three Arrows Capital Ltd (in Liquidation).
Insolvency is a proliferating issue within the cryptocurrency ecosystem, specifically in the realm of crypto lending services. Many of the largest services have recently filed for bankruptcy, with Genesis, Voyager Digital, Celsius, and BlockFi falling in spectacular and contentious fashion [source: AP.news.com].
In the case of Bester N.O & Others v Mirror Trading International Proprietary Limited (in liquidation) t/a MTI, the Western Cape Division of the High Court considered whether cryptocurrencies fell within the definition of property under the context of the Insolvency Act and whether courts in South Africa had jurisdiction in respect of cryptocurrency.
The recent ex-tempore judgment of Kawaley J in Atom Holdings1 in the Grand Court of the Cayman Islands serves as a timely reminder to practitioners and industry participants alike that obtaining an adjournment of a winding-up petition2 requires cogent evidence demonstrating good reason(s) for delaying what is otherwise the collective right of creditors to seek relief via court intervention.
Swee Siang Boey and Suchitra Kumar, RPC Premier Law
This is an extract from the 2024 edition of GRR's The Asia-Pacific Restructuring Review. The whole publication is available here.
This is an Insight article, written by a selected partner as part of GRR's co-published content. Read more on Insight
Introduction
The Law Commission published its Report on digital assets on 28 June 2023. It covers discussions on crypto-token collateral arrangements and apportionment of shortfall losses on the insolvency of a custodial holding intermediary.
To summarise, the Law Commission has made various recommendations in the Report, including that:
In this edition of Gilbert + Tobin's Corporate Advisory Update, we focus on key legal developments over the last month which are particularly relevant to in-house counsel.
The ACCC’s recommended merger reforms: a deeper dive
The ACCC’s recommended reforms have several significant implications for merging parties: