Akin Gump Restructuring Team Authors Article on the Treatment of Cryptocurrency in Bankruptcy Cases

Journal of Bankruptcy Law has published the article 'The Need for Clarity Regarding the Classification and Valuation of Cryptocurrency in Bankruptcy Cases,' written by Akin Gump financial restructuring partner Brad Kahn, counsel Rachel Biblo Block and associate Joseph Szydlo. The article looks at the growing popularity of cryptocurrency and the many questions being raised about the treatment of it in bankruptcy.

The authors begin with some background on cryptocurrency 'and the key characteristics of widely used coins and tokens.' They discuss whether cryptocurrencies should be classified as currencies or commodities, noting that 'the ultimate classification can impact the treatment of the underlying transaction in a bankruptcy case, particularly in the avoidance context.' They also look at how cryptocurrency fits into a bankruptcy case and within the Bankruptcy Code.

Kahn, Block and Szydlo then summarize several prominent non-bankruptcy court rulings on the appropriate classification of particular cryptocurrencies. They also look at how agencies like the Commodity Futures Trading Commission and the Securities and Exchange Commission treat cryptocurrency. They conclude by observing that 'the ultimate characterization of cryptocurrencies can have material impacts on the treatment of certain prepetition transactions and valuation issues in bankruptcy cases.'

To read the article in its entirety, please click here.