Although it’s inaccurate to say that the Chinese character for “crisis” combines the characters for danger and opportunity, the thought has resonated since President Kennedy repeatedly used this trope in his presidential campaign speeches.

Crypto firm bankruptcies and resulting disruption in the crypto ecosystem will continue to exacerbate liquidity and regulatory concerns in this space. Signs of contagion are evident as prices of almost every cryptocurrency type have halved in recent months. Since all participants supporting the crypto ecosystem are at risk, managing that risk is critical.

Fund managers should be prepared on multiple fronts, as the following examples illustrate:

The so-called crypto-winter and associated high profile insolvencies of major players such as FTX, Three Arrows Capital and Genesis may have dampened enthusiasm for this new asset class in some quarters. However, while volatility is likely to be an ongoing characteristic in the short and medium term, it is probably better to view recent events as a period of market correction rather than the "beginning of the end" of crypto assets.

The future for a new class of digital assets

FTX. Blockfi. Voyager. Celsius Network. Genesis. Silvergate Capital Corp. Whether due to alleged corporate fraud or the waterfall effect of a downward spiraling industry, as the past year has unfolded more and more cryptocurrency giants—previously touted by pundits and celebrities as sound new age investments—have filed for relief under the United States Bankruptcy Code.

The law can be slow to adapt to emerging technologies such as cryptocurrency. However, with a thorough knowledge of existing legal avenues, adaptation is not always necessary. Macpherson Kelley recently acted in a case that demonstrates how trustees in bankruptcy can use existing tools at their disposal to investigate, and ultimately recover, cryptocurrency held by bankrupts.

Identifying and locating cryptocurrency

If a trustee becomes aware that a bankrupt has owned or traded in cryptocurrency assets, the trustee will normally:

A GLOBAL LEGAL MEDIA & NISHLIS LEGAL MARKETING PUBLICATION THE US-ISRAEL LEGAL REVIEW 2022 IN ASSOCIATION WITH: Israel’s Unicorn Success Story SNNOVATION The US-Israel Legal Review 2022 1 Contents THE US-ISRAEL LEGAL REVIEW 2022 2 WELCOME FROM THE PUBLISHERS Global Legal Media and Nishlis Legal Marketing 4 ECONOMIC HEADWINDS, A HOT WAR AND A TRADE WAR: THE IMPACT ON ISRAEL’S COMPANIES With rising interest rates, rising inflation and reduced growth forecasts, how has that reality been faced by corporate clients and start-ups? Arnon, Tadmor-Levy provide some answers.

Corrupt managerial behavior has been a driver in the collapse of the cryptocurrency market. Enforcing and defending claims against directors and officers, where the directors and officers are not living in the United States and may not be U.S. citizens, is a current judicial focus in the U.S. litigation system. In the Three Arrows Capital (“Three Arrows”) chapter 15 case, the U.S. Bankruptcy Court for the Southern District of New York (the “U.S.

The crypto winter has brought a flurry of bankruptcy filings into the digital asset space. As pioneering cryptocurrency platforms collide with the Bankruptcy Code, unprecedented questions of law have left customers asking a fundamental question: who owns my crypto?

This question is especially prevalent in cases where the debtor company’s platform offered custodial accounts to customers. Digital asset custodial accounts have unusual attributes that have revealed cracks in customer protection when custodians have filed for bankruptcy.

Restructuring and Insolvency 2022/23: The year that was and what's to come

We take a look back at all the major developments in Restructuring and Insolvency law for 2022 and get a taste of what's yet to come in 2023 and beyond.

You can access the summary version of this update HERE (PDF).

Court exercises discretion to grant examination order

18 February 2022

In the Chapter 15 case of Three Arrows Capital, Ltd., the Bankruptcy Court for the Southern District of New York recently held that Rule 45 of the Federal Rule of Civil Procedure (“Rule 45”) authorizes service of subpoenas to U.S. nationals or residents who are in a foreign country through alternative means to personal service, including via email and Twitter.