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Bankruptcy lawyers stand to benefit greatly from crypto turmoil – report

Bankruptcy lawyers stand to benefit greatly from crypto turmoil – report

Bankruptcy lawyers stand to benefit greatly from crypto turmoil – report

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The cryptocurrency ecosystem has experienced a major downturn in the past year, sending the value of even the most prominent digital tokens plunging and triggering a slew of high-profile bankruptcies. On the flip side, law firms that council those struggling companies were said to have been raking in huge fees.

Bankruptcy lawyers, meanwhile, stand to gain from crypto exchange FTX’s recent Chapter 11 bankruptcy, which sent fresh shockwaves through the cryptoverse. Other noteworthy bankruptcies from earlier in 2022 included crypto hedge fund Three Arrows Capital and crypto lenders BlockFi, Voyager Digital (OTCPK:VYGVQ) and Celsius Network.

Generally, large law firms can collect over $100M in legal fees during a prolonged bankruptcy, Reuters reported Friday, citing experts.

For bankruptcy cases involving crypto-related firms, law firm Kirkland & Ellis is counseling BlockFi after it filed for Chapter 11 bankruptcy protection on Monday, and also represents Celsius and Voyager Digital (OTCPK:VYGVQ). The fees that Kirkland commands are some of the biggest rates in the industry, charging up to $1,995 per hour for work on the Celsius and Voyager cases, Reuters noted, citing court filings.

Previously, (Nov. 11) FTX’s Bankman-Fried resigned as CEO as crypto exchange starts Chapter 11 bankruptcy.

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FDIC Probes Voyager Digital Over FDIC Claims

FDIC Probes Voyager Digital Over FDIC Claims

Voyager Digital marketed its deposit accounts for crypto purchases as safe, but customers might not be afforded the protection they thought because their assets weren’t insured by the Federal Deposit Insurance Corporation (FDIC) in the way they thought, The Wall Street Journal reported Thursday (July 7).

The report noted that Voyager had marketed the accounts as protected by the FDIC. But that wasn’t entirely the case, and the FDIC is investigating, WSJ reported.

This comes as Voyager’s brokerage and lending services have been caught in a tangle of downward-spiraling crypto prices, and the company has filed for bankruptcy.

Voyager has frozen all activity, including withdrawals on $350 million in customer deposits stored at the New York-based Metropolitan Commercial Bank. Voyager said customers would be able to access those funds from the bank after the completion of a “reconciliation and fraud prevention process.”

There’s currently no timeline on when that will happen. But the report said that the funds are likely to be paid in full. This is not necessarily true for Voyager’s crypto assets.

Voyager advertised that deposits in Metropolitan Commercial Bank were insured by the FDIC. But the FDIC insures accounts only in the case of a failure of

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