Why the Messy 3AC, Celsius, and Voyager Bankruptcies Will Drag on for Years - Ep.377
Unchained
Custodial Complexities in Crypto Bankruptcies
This chapter explores the intricate issues surrounding custodial funds in the bankruptcies of Celsius and Voyager, highlighting the key differences between customer property and company property. It delves into the implications of these distinctions for creditors, particularly focusing on earned products and the challenges posed by commingled funds. The analysis extends to the legal standings of custody versus earned customers, revealing the potential impact of these classifications on asset recovery in bankruptcy proceedings.
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Two crypto law experts, WassieLawyer and Adam Levitin, analyze the bankruptcies of 3AC, Celsius, and Voyager. Show highlights:
- the difference between Voyager and Celsius “custody” and “earn” deposits
- why Celsius commingling customer custody and earn deposits could make it harder for creditors to get their money back
- what similarities and differences the Voyager and Celsius bankruptcies have
- how Chapter 11 bankruptcy works
- why Wassie and Adam believe Celsius might have engaged in shady business practices, whereas they believe Voyager was just an irresponsible lender
- what the latest is on the 3AC bankruptcy and the location of Kyle Davies and Zhu Su
- what Celsius and Voyager can clawback from 3AC
- how Alameda fits into the Voyager bankruptcy case
- whether creditors will receive funds back in crypto or dollars
- the three types of ways creditors can “claw back” funds in a bankruptcy case
- why Wassielawyer and Adam believe Celsius’ Chapter 11 plan to restructure around mining is so weird
- whether the founders from 3AC, Celsius, or Voyager will see jail time
Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021
Ava Labs: https://www.avax.network/
Episode Links
Adam Levitin
Adam Levitin 3AC/Celsius/Voyager Content
- https://www.thedeal.com/restructuring/oped-looming-legal-issues-in-cryptocurrency-bankruptcies/
- https://www.thedeal.com/restructuring/oped-crypto-winter-arrives/
- https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4107019
- https://twitter.com/AdamLevitin/status/1549142827774447619
- https://twitter.com/AdamLevitin/status/1548727063930077188
- https://twitter.com/AdamLevitin/status/1547945325125480451
- https://twitter.com/AdamLevitin/status/1547699788279193600
- https://twitter.com/AdamLevitin/status/1547584853180162049
- https://twitter.com/AdamLevitin/status/1547389680198508546
WassieLawyer
WassieLawyer 3AC/Celsius/Voyager Content
- https://twitter.com/wassielawyer/status/1543238225338454016
- https://twitter.com/wassielawyer/status/1538167831946473472
- https://twitter.com/wassielawyer/status/1545827666590601216
- https://twitter.com/wassielawyer/status/1536192639112183808
Celsius Content
- https://www.coindesk.com/policy/2022/07/19/celsius-lays-out-mining-focused-reorganization-plan-at-first-bankruptcy-hearing/
- https://twitter.com/BradyDale/status/1549415579399979008
- https://www.cnbc.com/2022/07/19/former-employees-say-issues-plagued-crypto-company-celsius-years-before-bankruptcy.html
- https://www.coindesk.com/business/2022/07/18/celsius-outlines-next-steps-as-bankruptcy-proceedings-begin/
- https://twitter.com/wassielawyer/status/1548947257961086976
- https://www.reuters.com/technology/crypto-lender-celsius-files-bankruptcy-2022-07-14/
- https://blog.celsius.network/a-memo-to-the-celsius-community-59532a06ecc6
- https://www.coindesk.com/markets/2022/07/13/wobble-in-steth-price-shows-fear-celsius-might-dump-435m-stake/
- https://www.coindesk.com/markets/2022/07/11/celsius-reclaims-172m-collateral-from-aave-compound/
- https://www.coindesk.com/markets/2022/07/13/celsius-pays-off-last-defi-loan-reclaims-nearly-200m-of-wrapped-bitcoin-from-compound/
Voyager Content
- https://unchainedpodcast.com/voyager-digital-files-for-chapter-11-bankruptcy/
- https://www.reuters.com/technology/crypto-lender-voyager-files-bankruptcy-2022-07-06/
- https://www.coindesk.com/business/2022/06/22/voyager-digital-requests-loan-repayment-from-3ac-considers-issuing-default-notice/
3AC
- https://unchainedpodcast.com/3ac-files-for-chapter-15-bankruptcy/
- https://www.theblock.co/post/157141/bankruptcy-court-judge-gives-green-light-to-serve-subpoenas-to-3ac-founders-for-discovery
- https://unchainedpodcast.com/why-possible-insolvencies-by-celsius-and-3ac-could-spell-disaster-for-crypto/
- https://unchainedpodcast.com/the-chopping-block-heres-what-was-so-bad-about-three-arrows-capital-ep-368/
- https://unchainedpodcast.com/does-venture-capital-investment-violate-the-ethos-of-crypto-sequoia-says-no-ep-367/
- https://unchainedpodcast.com/three-crypto-bankruptcies-3ac-celsius-and-voyager-what-happens-now-ep-374/
Other
- Kirkland and Ellis are running both bankruptcies
- What is happening to assets in bankruptcy cases
- No exposure for Coinbase
- KeyFi lawsuit
- 3AC founders break silence
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