In a recent article for Law360, Brattle Principal and White Collar and Investigations & Litigation Practice Co-Leader Paul Hinton explores how, in spite of blockchain transparency, traditional tracing analysis is still needed to recover funds deposited into cryptocurrency platforms.

Cryptocurrency tracing – which requires tracing blockchain activity and the internal transactions of crypto businesses – is essential to support creditor asset recovery efforts and clawbacks in cryptocurrency platform bankruptcies such as the ongoing Celsius saga. Mr. Hinton details how tracing methods can differ depending on whether crypto is held on account-based or unspent transaction output (UXTO)-based blockchains, and examines the potential recovery avenues for investors in Celsius’s Custody and Borrow accounts. Such efforts will likely be a test case for investors considering similar actions in other crypto business bankruptcies, including those of FTX, Voyager Digital, and Genesis.

The full article, “How Celsius Customers May Use Tracing to Recover Deposits,” is available below (subscription required).

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