The Impact of Recent Crypto Bankruptcies on Regulation

The collapse of major crypto institutions like FTX, Celsius, Voyager, and BlockFi has highlighted the need for tailored regulations in the crypto ecosystem. The bankruptcy courts have played a crucial role in these cases, making important decisions about information disclosure, creditor status, and governance. However, the bankruptcy courts lack expertise in crypto markets, and the high cost of buying expertise has affected the recovery of unsecured creditors. The regulatory role of bankruptcy courts has implications for the SEC and other regulatory bodies, as they navigate the evolving landscape of crypto regulation.