Crypto bankruptcies may put some customers at the bottom.
By The Exchange Team
First time in cryptocurrency's short history, prominent platforms have gone to US bankruptcy law. Now bankruptcy courts must divide clients' frozen crypto assets.
Celsius and Voyager Digital have filed for bankruptcy this year, stripping millions of crypto investors of assets.
The bankruptcies follow Cred's November 2020 filing, two years after its 2018 debut.
All three platforms filed under Chapter 11, which helps debt-laden corporations shed financial commitments, rearrange corporate activities, and become stable.
These assertions have raised serious concerns about whether customers' frozen monies may be reclaimed.
Answer depends on unsettled legal difficulties and how bankruptcy judges apply long-established laws to a new corporation, say bankruptcy lawyers.
Crypto holders who are designated as unsecured creditors may never recover their funds. Because they are at the bottom of the totem pole.