On the 9 of March earlier this year, the Court of Appeal (Civil Division) in the UK dismissed an appeal and confirmed that when an electronic money institution (“EMI”) is placed into administration, it was not necessary to impose a statutory trust in order to fulfil the purposes of the safeguarding provisions under EMD (Electronic Money Directive 2009/110) and PSDII (Payment Services Directive 2015/2366) considering that the spirit of both Directives was solely to preserve the sums paid by the EMI’s customers in the case of insolvency and against its other creditors.
In times of economic uncertainty, fraud typically increases. And these are certainly economically uncertain times. Fraud has been on the rise over recent years and that trend is set to continue. The motivation and opportunity to commit fraud increases as financial pressures loom over individuals and businesses. We are also set to see a continued increase in insolvencies as the impact of the pandemic and other global events set in. The appointment of insolvency practitioners means frauds which might have otherwise continued or remained concealed are more likely to be uncovered.
There has been no shortage of high-profile insolvencies in the crypto market in recent months across a range of market participants and geographies. These include the US Chapter 11 and Bahamas provisional liquidation of FTX as well as the US Chapter 11 filings of BlockFi, Singapore-based crypto hedge fund ThreeArrows Capital, US-based lenders Celsius Network and Voyager Digital, US-based crypto mining data centre Compute North and German crypto bank Nuri.
FTX was the third-largest cryptocurrency exchange at one point, but came crashing down to earth in 2022 and filed for bankruptcy in the US on 11 November. The platform’s downfall has reignited the debate around the regulation of cryptocurrencies globally and in specific jurisdictions. Marc Jones considers the arguments here.
What we've been up to?
In the six months since our last full newsletter, the UK has witnessed some monumental events, the most significant of course being the death of HM Queen Elizabeth II – followed by no less than three different occupants at Nos. 10 & 11 Downing Street, a UK record summer temperature of 40.3C, inflation hitting a 41 year high, startling increases in energy & food prices (exacerbated by the ongoing war in Ukraine) and, as of this month, the UK economy officially falling into recession.
Over the past decade there has been an influx of small- and medium-sized entrants to the U.K. gas supplier market, which is supervised by Great Britain's[1] independent energy regulator, the Office of Gas and Electricity Markets (Ofgem).[2] According to Ofgem, this market development had the effect of increasing price competition and putting pressure on incumbent suppliers to improve customer service for consumers.[3]
Yen Sum and Hugo Bowkett, Latham & Watkins LLP
This is an extract from the third edition of GRR's The Art of the Ad Hoc. The whole publication is available here.
Introduction
Ross Miller, Simmons & Simmons LLP
This is an extract from the third edition of GRR's The Art of the Ad Hoc. The whole publication is available here.
Introduction
Howard Morris and Sonya Van de Graaff, Morrison & Foerster LLP and Katten Muchin Rosenman LLP
This is an extract from the third edition of GRR's The Art of the Ad Hoc. The whole publication is available here.
Scope of the chapter
Part I: Introduction and Background Cryptoassets & Insolvency 2 Introduction Cryptoassets have emerged from relative obscurity to become an increasingly significant and mainstream presence: in just five years the global market cap for cryptocurrencies rose from around $15bn to over $3tn at its peak in November of last year.