Cryptocurrencies in Bankruptcy: A Complex Affair

The role of cryptocurrencies in a bankruptcy matter can be considered, in a word, enigmatic. Judges that have attempted to apply insolvency law to cryptocurrencies have had to answer many novel questions, starting with whether digital assets themselves even belong in their courts. The lack of consensus regarding the nature of cryptocurrency has made bankruptcy proceedings difficult, as there is not yet agreement on a number of fundamental issues that determine insolvency outcomes. This conundrum has been exacerbated by the extreme volatility of cryptocurrencies such as bitcoin, which has seen its value plummet from $15,004.10 on 1st January 2018 to $4,494.07 on 22nd November 20181.

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