The Crypto Quandary: Is Bankruptcy Ready?

Megan McDermott | April 18, 2021

As the United States grapples with how best to manage a global pandemic, bankruptcy courts are bracing for the inevitable fallout from COVID-19. As we saw in the wake of the 2008 financial crisis, hard- hit businesses will need to reorganize to adjust to new conditions, while out- of-work consumers will need debt relief options. But there will be a new twist for this impending wave of bankruptcies: how should bankruptcy courts deal with crypto assets like Bitcoin? This Essay argues that the rise of cryptocurrency investments over the last decade poses serious complications for the next round of consumer and business bankruptcies. Although legislative solutions may be necessary to adequately address these complications, at the very least, greater awareness of these issues will help ensure that courts and stakeholders are better prepared to address this looming crisis.