ISDA argued the need for clarity in rules that govern the ownership of customer digital assets in the event of an intermediary’s insolvency.

Introduction

The law is constantly developing to fit the ever-changing world. Most recently, with the digitalisation of the commercial landscape and the proliferation of cryptocurrencies, NFTs and metaverse-related businesses, the courts have had to apply or adapt the law to deal with novel situations. This was the case in Re Babel Holding Ltd and other matters [2023] SGHC 98, where the Singapore High Court had to apply restructuring and insolvency law in the context of a cryptocurrency-related business.

The Hong Kong High Court has found that cryptocurrencies are property in a landmark case, further boosting the city’s virtual asset industry and its ambition to become the Asian crypto hub.

Following are our summaries of the civil decisions of the Ontario Court of Appeal for the week of April 24, 2023.

In Re Zipmex Pte Ltd and other matters [2023] SGHC 88, the Singapore High Court imported into the Singapore restructuring regime the US concept of an "administrative convenience class" in a scheme voting exercise. This concept allows debtors to obtain an approval from a large number of low value creditors without those creditors being involved in the voting exercise. This reduces the administrative burden on restructuring entities.

IAIS launches climate risk training materials for insurance supervisors

According to a press release published on April 5th, 2023, the International Association of Insurance Supervisors (IAIS) and the Financial Stability Institute jointly launched new online training materials on climate risk for insurance supervisors.

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.