BLP Spring Webinar Series on Reckoning with the Crypto Implosion: Breaking Down the Crypto Winter & the Implosion of Digital Asset Trading Exchanges with Josh Sussberg
On March 20, 2023, Professor Gerard Comizio, Associate Director of the BLP interviewed Josh Sussberg, a member of the Executive Committee and partner in the Restructuring Practice Group at Kirkland & Ellis, as part of the Business Law Program’s (BLP) Spring Webinar Series. The discussion focused on the legal, policy, and regulatory issues raised by the recent “crypto winter” and the direction of digital asset activities and regulation.
Already consistently recognized as one of the country’s leading restructuring lawyers, Mr. Sussberg began working with the first crypto trading exchange restructuring bankruptcies, beginning with the Voyager Digital bankruptcy in early 2022. Since then, he has also been representing Celsius Network and BlockFi in their chapter 11 bankruptcy cases.
Mr. Sussberg observed that fundamentally, chapter 11 provides a rehabilitative tool “that allows people to get more in value than they would otherwise receive if the company was shot down” so the process for firms in the crypto industry is similar to chapter 11 cases for other financial firms. In particular, Mr. Sussberg remarked that the run on crypto exchanges and the recent challenges faced by Credit Suisse and other banks were similar in that the various financial institutions faltered initially, which precipitated crises of customer confidence and account runs, necessitating a chapter 11 reorganization.
Mr. Sussberg stated that thoughtful regulation of the crypto industry would be welcome and helpful to ensure the industry can remain a viable opportunity for many different people who have invested. He did say, however, that the U.S. bankruptcy code and system was working well to address the quirks of crypto industry, as evidenced by the pending cases and their movement forwards as judges have come to understand the issues that they are attendant to. To view a recording of the discussion, click here.