Cryptocurrency

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Following many months of discussion and review by a working group of traditional finance institutions and crypto-native exchanges and platforms led by the International Swaps and Derivatives Association, Inc. (“ISDA”), ISDA published the Digital Asset Derivatives Definitions (the “Definitions”) on January 26, 2023 for use with Bitcoin (BTC) and Ether (ETH)…

The fallout continued last week for embattled crypto trader Avraham Eisenberg, as Mango Labs filed litigation in the Southern District of New York to recover $47 million Eisenberg drained from decentralized crypto lending platform Mango Markets by manipulating the value of the Mango Markets native token. The lawsuit from Mango Labs is just the latest…

Genesis Global’s Chapter 11 filing on January 20th was little surprise to those closely following the cryptocurrency markets and after its decision to “pause” withdrawals in mid-November. Digital Currency Group, Inc. (“DCG”), the parent of Genesis Global Holdco LLC (“Genesis”) and its largest borrower, is not part of the bankruptcy case and instead may…

Earlier this month, the SDNY Bankruptcy Court answered one of the gating questions at the center of Celsius Network’s Chapter 11 bankruptcy regarding the ownership of the approximately $4.2 billion in crypto assets.  Celsius account holders had been demanding the return on their crypto deposits in interest-bearing accounts (“Earn Accounts”), while Celsius debtors asserted that…

On January 3, 2023, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (the “Federal Banking Regulators” or “Agencies”) issued a Joint Statement (“Joint Statement”) highlighting key risks for banking organizations associated with crypto-assets and the crypto-asset sector. 

The Joint Statement…

While legal, regulatory and tax uncertainty continues to affect financial transactions in digital assets, we are seeing incremental guidance developing on US federal taxation issues. The Infrastructure Investment and Jobs Act (Infrastructure Act), enacted in 2021, amended provisions in sections 6045 and 6045A to clarify and expand the rules regarding the reporting of information on…

John J. Ray, CEO of the FTX debtors will testify tomorrow before the U.S. House Committee on Financial Services at a hearing entitled “Investigating the Collapse of FTX, Part I.”  Sam Bankman-Fried, the former CEO of the FTX Group, is scheduled to appear as well, albeit remotely. 

Mr. Ray’s prepared remarks are available online…

Shoba Pillay, the Examiner appointed in Celsius’ bankruptcy cases, filed her interim report on November 19, 2022.  The Celsius Examiner’s report provides some important insight into a crypto-exchange’s operational and risk management failures which may provide investors and creditors some insight into what to expect in FTX.

The initial report provides important insight on the…

FTX has warned its investors, customers and the crypto-world that they may have to file for bankruptcy protection without rescue financing to address its immediate liquidity crisis. Unlike the bankruptcy cases of Celsius and Voyager, FTX’s case, should it file, will likely involve many institutional investors with secured and unsecured claims. These institutional investors…