Digital Assets, Cryptocurrency, and NFTs in Bankruptcy: Administration, Classification, Valuation, and Recovery

This CLE course will guide bankruptcy attorneys through the intersection of digital assets and bankruptcy. The program will offer an overview of digital assets; how they are identified, investigated, preserved, and administered; how digital assets can be collateralized and valued; and what happens to those assets when a digital asset exchange or financier seeks bankruptcy protection.

According to the U.S. Trustee, cryptocurrency and other digital assets are appearing more frequently in bankruptcy cases. Cryptocurrency litigation is soaring, prompted by a surge of investors in the space. It has generated more than 200 class action lawsuits, not including private lawsuits.

One of the allures of virtual assets is the ability to trade them anonymously, which is opposed to the absolute transparency required under the Bankruptcy Code. Creditors need procedures for investigating, safeguarding, and administering digital assets. Bankruptcy lawyers must understand how these assets create value, how they can be collateralized, and what happens on default.

The creation and transfer of digital assets can defy conventional understanding of these terms and make enforcing the automatic stay or avoiding transfers tricky. What happens to assets in the possession of digital exchanges that file bankruptcy and the nature of the contractual obligations between the parties raises issues under Sections 365 and 363 of the Bankruptcy Code.

Listen as this panel of trailblazing experts guides counsel through the issues that must be addressed when digital assets are part of a bankruptcy.