How Chapter 15 and Chapter 11 Shape Crypto Bankruptcy Recoveries
Summary
The article explains how U.S. Chapter 15 and Chapter 11 proceedings applied to crypto firms after the 2022 market failures. It describes Chapter 15 as a way to coordinate U.S. courts with a foreign insolvency process, using Three Arrows Capital as its example. Chapter 11 allows a business to reorganize under court supervision while it continues operating, though proceedings can be costly and may instead end in liquidation or dismissal.
The discussion highlights how filing type, asset ownership, and creditor status can affect recovery. It notes that retail customers are generally unsecured creditors and may rank behind secured creditors, and it describes the Celsius Earn terms as a case where deposited assets were treated as transferred to the company. Examples involving Voyager, FTX, Alameda, BlockFi, and Genesis illustrate the cascading effects of company exposures and failed support arrangements. The piece is a time-bound overview of proceedings and reported developments, not legal advice or a reliable estimate of any claimant’s eventual recovery.
Key ideas
- Chapter 15 can help coordinate a U.S. court with a foreign insolvency proceeding.
- Chapter 11 permits court-supervised reorganization while a business continues operating.
- A Chapter 11 case can instead be converted to liquidation or dismissed.
- Retail customers may rank as unsecured creditors and face lower repayment priority.
- Account terms can affect whether deposited crypto is treated as customer property or company property.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.