Is Help Coming For Users of Bankrupt Crypto Exchanges?September 12, 2022 – Article
Jonathan Shenson, Bankruptcy, Reorganization & Capital Recovery Partner, authored the article "Is Help Coming For Users of Bankrupt Crypto Exchanges?" published by Law360. In the article, Jonathan discusses Voyager Holdings and Celsius Network's decision to file for Chapter 11 bankruptcy, whether custodially held crypto-assets are property of the estate, and how this affects their customers.
To avoid the proverbial run on the bank, many crypto exchanges halted trading and froze customer accounts, and some have filed for Chapter 11 bankruptcy protection, like Voyager Holdings Inc. and Celsius Network LLC.
The Voyager and Celsius Chapter 11 filings have enabled these crypto exchanges to use the breathing spell of bankruptcy — e.g., the automatic stay — to hopefully ride out the crypto winter and attempt to reorganize or pursue some other strategy to maximize recoveries for all stakeholders, perhaps at the expense of their customers.