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if you lose If the crypto company holding your assets didn’t have access to your money when it filed for bankruptcy, you’re probably out of luck.
With Chapter 11 bankruptcy proceedings underway with several high-profile cryptocurrency companies, those who have lost money are sure to want all, or at least some, of their money back. The house shared its thoughts with TechCrunch on what these cases mean for creditors, and what happens to people who see their money disappear overnight.
Earlier this month, Genesis Global Trading, a subsidiary of crypto conglomerate Digital Currency Group (DCG), filed for Chapter 11 bankruptcy. Genesis is the latest crypto-focused entity to join the Chapter 11 bankruptcy club, alongside FTX, BlockFi, Three Arrows Capital, Celsius Network and Voyager.
For the latest Chapter 11 filers, Genesis owes over $3.6 billion to the top 50 unsecured creditors, and FTX owes over $3 billion to the top 50 unsecured creditors. In bankruptcy filings, most, if not all, of the identity verification information of the parties is redacted.
One of FTX’s largest unsecured creditors owes more than $226 million and, according to previous bankruptcy filings, the company may have more than 1 million creditors.
“If I were a creditor on FTX, I’d try my best, but expect to face reality. If a dollar goes up to 2 cents or more, I consider myself lucky.” Terrence Yang, Managing Director of Swann Bitcoin
With funds ranging from small to multi-million dollars involved, it’s safe to say that many people are heavily invested in the outcome of these bankruptcy cases. However, it is not certain if they will be able to see the deposited funds again.
What happens to creditors “will largely depend on the company’s asset-liability mix and the likelihood that the same company will go bankrupt,” Fireblocks chief legal and compliance officer Jason Allegrante told TechCrunch. rice field. “For example, if the business is healthy but experiences a liquidity shock, there is still a chance that the business will recover and generate revenue” means that creditors may reunite with some of the funds. means
Input Output Global Chief Legal Officer and Sullivan & Wooster Special Counsel Joel Telpner told TechCrunch that secured creditors will be given priority “whenever assets are distributed.” said. “All other creditors queue after the secured creditor is paid first. If the company has shareholders, to the shareholders if any remain.”
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