On July 21, 2022, the Department of Justice (“DOJ”) and the Securities Exchange Commission (“SEC” or the “Commission”) announced parallel actions against a former Coinbase product manager, his brother, and his friend for orchestrating a year-long insider trading scheme.[1]  According to the agencies’ respective charging documents, Defendant Ishan Wahi used inside information gleaned from his employment at Coinbase to tip…

In light of recent volatility in crypto markets and news of several crypto entities filing for bankruptcy,[1] market participants are increasingly scrutinizing the credit of crypto intermediaries and considering whether there will be an influx of additional filings.  In thinking through credit risk, one critical preliminary set of questions that market participants should ask is which bankruptcy regime is likely…

Originally Published: July 13, 2022 Updated: July 14, 2022 One of the key unresolved questions surrounding crypto-custodian bankruptcy proceedings under the U.S. Bankruptcy Code is whether or not digital assets that are held by a crypto exchange on behalf of platform users could be viewed as the exchange’s corporate assets in the proceeding, which in turn could be used to satisfy…

Introduction On June 7, U.S. Senators Kirsten Gillibrand (D-NY) and Cynthia Lummis (R-WY) (together, the “Senators”) introduced the Responsible Financial Innovation Act, a bipartisan bill that seeks to create a comprehensive regulatory framework for digital assets.  The Senators have stated that the purpose of the proposed legislation is to balance innovation with customer protection. Coverage of the bill has been…

On June 1, the United States Attorney for the Southern District of New York (“SDNY”) and the New York Field Office of the Federal Bureau of Investigation (“FBI”) unsealed an indictment charging Nathaniel Chastain, a products manager at OpenSea,[1] with one count of wire fraud and one count of money laundering for his alleged insider trading of Non-Fungible Tokens (“NFTs”).[2]…