Cryptocurrency in a Declining Market: What Lawyers Need to Know About Bankruptcy, Regulation, and Other Trends

Like any other investment, cryptocurrency can be exciting and rewarding when the market is hot — and when it cools, investors, funds, and the lawyers advising them can face some tricky questions.

As stated in a recent briefing from 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 declining market – nor bankruptcy and its related laws.

During the information-packed one-hour briefing, the presenter Noah Schottenstein, from DLA Piper, guides participants through the basics of the crypto finance market, defining its unique characteristics compared to traditional finance. It goes on to explore new legal issues that bankruptcy courts are only beginning to face.

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As Schottenstein explained, the “crypto winter” that began earlier this year was associated with the Terra/Luna cryptocurrency crash. The dramatic fall 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 application of avoidance actions to cryptocurrency transactions, the types of claims and protections that retail “depositors” and other counterparties may hold in bankruptcy procedures, and the overlap between regulatory structures and bankruptcy law.

In-house attorneys, outside attorneys, and compliance, finance, and other related professionals interested in the structure of cryptocurrency financial markets and bankruptcy law can keep up to date with this program — and find out why expectations about the impact of bankruptcy can be upset in this changing landscape.

Crypto and Securities Regulation

The bankruptcy program comes at a time when the intersection of regulation and crypto is an increasingly hot topic. To The SEC speaks in 2022presented by PLI with the SEC in Washington, D.C. on September 8-9, a main topic was “crypto, crypto, crypto,” said Kurt Wolfe, co-host of PLI’s inSecurities podcast, in an episode on the conference. “Every panel I’ve attended has talked about crypto, even some of the ones you wouldn’t think of, like trading and markets,” he said.

Wolfe and co-host Chris Ekimoff discussed the importance of President Gensler’s intervention introductory remarks for The SEC speaks, titled “Kennedy and Crypto”. In his speech, the president asserted, “Nothing about the crypto markets is inconsistent with securities laws. Investor protection is equally relevant, regardless of the underlying technologies.

Interested in knowing 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 take place via live webcast and in person on October 14. This unique program is designed to equip lawyers with the knowledge to become more knowledgeable advocates of technology-related issues and understand emerging trends in this area, including blockchain, cryptocurrencies, and NFTs. .

For those wishing to dive into the growing crypto trend of DAOs or decentralized autonomous organizations, PLI will offer Decentralized automated organizations (DAO): practical applications and legal framework. Sign up for the one-hour briefing on Nov. 16 to learn how DAOs have the potential to disrupt the traditional economic system by becoming active investors and lenders, while raising important issues of securities law, tax and of corporate law.

See additional crypto-related content at PLI website.


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Practicing Law Institute is a non-profit learning 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 that are taught by more than 4,000 volunteer faculty, including lawyers, 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 the PLI PLUS online platform. The essence of PLI’s mission is its commitment to the pro bono community. See upcoming PLI programs here.

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Cryptocurrency in a Declining Market: What Lawyers Need to Know About Bankruptcy, Regulation, and Other Trends


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