The cryptocurrency industry was rocked by a series of bankruptcies in 2023, among which was the prominent and complex case of FTX, where creditors are attempting to recover over $8 billion. This case, filed in November 2023, is expected to be protracted, overshadowing other major crypto bankruptcies like Celsius and BlockFi.
Alan R. Rosenberg, a partner at Markowitz Ringel Trusty & Hartog, anticipates a lengthy process due to FTX's multiple clawback claims aimed at recouping payments made before its insolvency.
Rosenberg, in an interview with The Block, noted that these claims, especially those involving significant transfers to large organizations, could extend for years. While such claims typically settle out of court, the negotiation process itself is time-consuming.
FTX's legal battles are multifaceted. Apart from clawback attempts, the exchange faces a substantial $24 billion claim from the Internal Revenue Service (IRS) for unpaid taxes. FTX has managed to settle mutual complaints with Genesis, a major creditor of its affiliate Alameda Research, but still confronts unresolved lawsuits, including a $1 billion claim against ByBit.
The exchange is also seeking to recover $71 million from its philanthropic arm and payments made to celebrities for promotions. Additionally, the bankruptcy estate is involved in lawsuits over transactions deemed fraudulent, suing former CEO Sam Bankman-Fried, other executives, and Bankman-Fried's parents.
A pressing issue in crypto bankruptcies is the mode of creditor payment – in crypto or fiat. With no official guidelines, Rosenberg expressed hope for new legislative mechanisms to address the distribution of cryptocurrencies in such cases, spurred by the scale and impact of recent crypto insolvencies.
- SEO Powered Content & PR Distribution. Get Amplified Today.
- PlatoData.Network Vertical Generative Ai. Empower Yourself. Access Here.
- PlatoAiStream. Web3 Intelligence. Knowledge Amplified. Access Here.
- PlatoESG. Carbon, CleanTech, Energy, Environment, Solar, Waste Management. Access Here.
- PlatoHealth. Biotech and Clinical Trials Intelligence. Access Here.
- Source: https://www.cryptocompare.com/email-updates/daily/2024/jan/02/
- :has
- :is
- :where
- $1 billion
- 2023
- 2024
- a
- Additionally
- address
- Affiliate
- against
- aimed
- Alameda
- ALAMEDA RESEARCH
- also
- among
- an
- and
- anticipates
- apart
- ARE
- ARM
- At
- attempting
- Attempts
- Bankman-Fried
- bankruptcies
- Bankruptcy
- battles
- BE
- before
- Billion
- Block
- BlockFi
- but
- by
- Bybit
- case
- cases
- celebrities
- Celsius
- ceo
- claim
- claims
- COM
- complaints
- complex
- could
- Court
- creditor
- creditors
- crypto
- crypto roundup
- CryptoCompare
- cryptocurrencies
- cryptocurrency
- Cryptocurrency Industry
- deemed
- distribution
- due
- especially
- estate
- Ether (ETH)
- exchange
- executives
- expected
- expressed
- extend
- faces
- Fiat
- filed
- For
- Former
- former ceo
- fraudulent
- from
- FTX
- Genesis
- guidelines
- hope
- HTTPS
- Impact
- in
- Including
- industry
- Insolvencies
- INSOLVENCY
- internal
- Internal Revenue Service
- Interview
- involved
- involving
- IRS
- issue
- ITS
- itself
- January
- large
- Lawsuits
- Legal
- Legislative
- like
- made
- major
- managed
- mechanisms
- million
- Mode
- multifaceted
- multiple
- mutual
- New
- no
- noted
- November
- of
- official
- or
- organizations
- Other
- out
- over
- parents
- partner
- payment
- payments
- philanthropic
- plato
- Plato Data Intelligence
- PlatoData
- pressing
- process
- prominent
- Promotions
- R
- recent
- Recover
- research
- revenue
- rocked
- roundup
- s
- Sam
- Sam Bankman-Fried
- Scale
- seeking
- Series
- service
- settle
- significant
- Still
- substantial
- such
- Taxes
- that
- The
- The Block
- These
- this
- those
- time-consuming
- to
- Transactions
- transfers
- typically
- was
- which
- while
- with
- years
- zephyrnet
