In a recent article for the International Journal of Blockchain Law, Brattle Principal and Cryptocurrency & Digital Assets Co-Leader Sujay Dave and David Adlerstein of Wachtell, Lipton, Rosen & Katz explore the uncertainty that crypto customers face when trying to recover assets in the event of a centralized crypto platform’s bankruptcy.
This issue has come into sharper focus with the 2022 bankruptcies of Celsius Network LLC – a company that offered interest-bearing crypto accounts – and crypto exchanges FTX and BlockFi. All three entities froze customer assets upon filing for bankruptcy and left customers without a clear sense of how, or even if, they could recover their assets. In the article, the authors evaluate how asset protections afforded to customers of traditional financial institutions compare to similar businesses in the crypto space. They also highlight past instances where crypto customers have attempted to recover assets in bankruptcy and discuss how asset protections in the crypto space may evolve in the future.
The full article, “Crypto Bankruptcies Reveal Fault Lines in Asset Recovery,” is available below.View Article