Bankruptcy & Insolvency

Not your keys, not your coins. We have a wealth of experience in helping depositors navigate the intricacies of an exchange insolvency that dates back to the MtGox bankruptcy that was filed in 2014 in Japan.

Not your keys, not your coins. This apt maxim is well appreciated by anyone who has lost coins in an exchange insolvency.

If you are owed money, and they are slow in repayment, there is no time to waste. You need to act immediately to secure your assets. Insolvencies can occur suddenly and without warning.

If your deposits have been converted into a claim in a bankruptcy, the game is not over. Creditors can form committees or at times intervene directly in proceedings to ensure the restructuring process isn’t abused by debtors.

Bankruptcy filings contain a wealth of information. If a bankruptcy filing is relevant to your case, we can dig through the files, read between the lines, and find what is needed to help you.

Bankruptcies involving digital assets are frequently international in nature, posing additional complexities. A restructuring that was approved by a court in a foreign country can be challenged in the courts of other countries to prevent it from being recognized. This is called a chapter 15 proceeding in the US.

If you have managed to get funds out from an insolvent exchange, you still are not out of the woods. Once in bankruptcy, a trustee will be appointed who will try to claw back funds to prevent preference transfers. Even if your withdrawal was received in the ordinary course of business, you may still face an effort to claw them back, no matter where in the world you are.

Frequently asked questions:

Why do I need a “crypto-lawyer”?

Not every legal situation requires an attorney with specialized knowledge regarding cryptocurrency. However, people who operate in the crypto-space often don’t realize how specialized the area is. Once you get involved, surround yourself with other crypto holders, and make it a part of your life, you become disconnected from people who don’t get it, and it is always difficult to explain to the uninitiated. The last thing you need is to have to explain it all to your lawyer. Your attorney needs to understand how blockchains work, how transactions are irreversible, how to hold, store, manage, and trade cryptocurrency, and who the players in the industry are. We do, and have been in the industry since the early days.

Why do I need a lawyer at all?

Legal strategy is not merely about knowing the facts about the law. Rather, is about contextualizing the law to make it work for you. When you are making business decision you need to take the legal dimensions into consideration as a core part of your strategy. An understanding of the complex interplay of business-legal decisions cannot be gained from a quick google search. The advice you get from a lawyer with deep experience in startups is invaluable.

Where should I form my Company?

It depends on your situation. The rules around cryptocurrency are complex and vary from country to country and change constantly. We have our finger on the pulse of various countries across the planet and can help you navigate it. If you goal is tax optimization, minimal regulatory exposure, and convenience, we can review your plans and create the ideal structure for you. We work with some of the top cryptocurrency projects and exchanges to develop their corporate structures from scratch.

We regret forming our corporate structure as we did, can we fix it?

Absolutely. Lawyers are usually very expensive and legal advice is often neglected in early stage start-ups. Moreover, nobody can predict the future, and we have many clients that started off in ‘safe’ jurisdictions that became very unwelcoming places for cryptocurrency projects. Unscrambling an egg can be harder than scrambling one, so these fixes are often more complicated and involved, but we have expertise and experience in moving actual projects to higher ground.