Like any other investment, cryptocurrency can be exciting and rewarding when the market is hot – and when it cools, investors, funds and the lawyers who advise them can face some tough questions.
As stated in a recent briefing by the Practicing Law Institute, Cryptocurrency and Bankruptcy: What Lawyers Need to Know Now that ‘Crypto Winter’ Is Herecrypto is not immune to the effects of a falling market – nor is bankruptcy and its associated laws.
During the information-packed hour-long briefing, the presenter Noah Schottenstein, from DLA Piper, takes participants through the basics of the crypto finance market, defining its unique characteristics compared to traditional finance. It continues to explore new legal issues that bankruptcy courts are just beginning to face.
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As Schottenstein explained, the “crypto winter” that began earlier this year was linked to the collapse of the Terra/Luna cryptocurrency. The dramatic decline in the crypto market eventually led to high-profile bankruptcy filings, including hedge fund Three Arrows Capital and retail-focused crypto platforms Voyager and Celsius.
The briefing continues with discussions on topics such as the implementation of cryptocurrency transaction avoidance actions, the types of claims and defenses that retail “depositors” and other counterparties may have in bankruptcy proceedings, and the overlap between regulatory structures and bankruptcy law.
In-house counsel, outside counsel and compliance, finance and other related professionals interested in the structure of cryptocurrency financial markets and bankruptcy law can keep up with this program – and understand why expectations of the impact of bankruptcy may be upset in this changing landscape.
Crypto and Securities Regulation
The bankruptcy filing comes at a time when the intersection of regulation and crypto is an increasingly hot topic. To The SEC is talking in 2022presented by PLI with the SEC in Washington, DC on September 8-9, the main theme was “crypto, crypto, crypto,” said Curt Wolff, PLI’s co-host inSecurities podcast, in an episode of the conference. “Every panel I’ve been on talks about crypto, even some of the ones you wouldn’t think of like trading and markets,” he said.
Wolff and co-host Chris Ekimoff discussed the significance of President Gensler’s intervention introductory notes for The SEC has spoken, titled “Kennedy and Crypto.” In his speech, the president stated, “Nothing about the crypto markets is inconsistent with the securities laws. Investor protection is equally relevant regardless of the underlying technologies.
Interested in learning more?
PLI offers a wealth of cryptocurrency resources.
If you want to brush up on the basics, check out the full day program Think like a lawyer, talk like a geek 2022: master the technologywhich will be held via live webcast and in person on October 14th. This unique program is designed to provide lawyers with the knowledge to become more knowledgeable advocates on technology-related issues and to understand emerging trends in the field, including blockchain, cryptocurrencies and NFTs. .
For those willing to dive into the growing crypto trend of DAOs or Decentralized Autonomous Organizations, PLI will offer Decentralized Automated Organizations (DAOs): Practical Applications and Legal Framework. Register for the one-hour briefing on November 16 to learn how DAOs have the potential to disrupt the traditional economic system by becoming active investors and lenders while raising important securities, tax and corporate law issues.
See additional crypto related content at PLI website.
The Practicing Law Institute is a not-for-profit educational organization dedicated to keeping lawyers and other professionals at the forefront of knowledge and expertise. PLI is chartered by the Regents of the State University of New York and was founded in 1933 by Harold P. Seligson. The organization offers the highest quality accredited continuing legal and professional education programs in a variety of formats taught by more than 4,000 volunteer faculty, including attorneys, judges, investment bankers, accountants, corporate counsel, and US and international government regulators. PLI publishes a comprehensive library of treatises, textbooks, answer books and journals also available through PLI PLUS online platform. At the core of PLI’s mission is its commitment to the pro bono community. View upcoming PLI programs here.