Bitcoins in Bankruptcy: Trouble ahead for Investors and Bankruptcy Professionals?

Cadwalader Attorneys David Kronenberg and Daniel Gwen authored an article for Pratt's Journal of Bankruptcy Law titled "Bitcoins in Bankruptcy: Trouble Ahead for Investors and Bankruptcy Professionals?" It discusses whether the attributes that make Bitcoin an attractive virtual currency may also present difficulties in bankruptcy proceedings. In the words of the authors:

It is hard to ignore the media attention surrounding Bitcoin these days. Within the last few months, the virtual currency has surged to new highs, was the focus of a Congressional hearing, and was the subject of comments by former Federal Reserve Chairman Ben Bernanke, who stated that it and other such currencies "may hold long-term promise." As Bitcoin gains legitimacy, companies offering Bitcoin-related services have sprouted. As with any new industry, however, although there may be spectacular successes, there also will be many failures. A reminder of this is that amid the frenzy, a company named Alydian recently filed the first Bitcoin-related bankruptcy. Accordingly, Bitcoin users and investors in Bitcoin companies should be aware that the qualities of Bitcoin that make it attractive outside of bankruptcy could present major difficulties in a bankruptcy proceeding.

Click here to view the article, "Bitcoins in Bankruptcy: Trouble ahead for Investors and Bankruptcy Professionals?" by David Kronenberg and Daniel Gwen.