Wild fluctuations in cryptocurrency value potentially invite both a surge in bitcoin-related bankruptcies and an increase in bitcoin-related fraudulent-transfer litigation, according to the February ABI Journal. Alan Rosenberg of Markowitz, Ringel, Trusty + Hartog, PA (Miami) addresses these issues in his Journal article, “The Cryptocurrency Craze: How to Treat Bitcoins in Fraudulent-Transfer Litigation.”
In contrast to traditional forms of currency, bitcoins are not issued by a government or central banking authority, but instead are created by “mining,” a process where “miners” receive transaction fees and newly minted bitcoins in return for verifying and recording payments in a public ledger, Rosenberg writes. “While cash remains king of the bankruptcy realm, the rapid increase in the use and consumption of bitcoin is undeniable.”
Rosenberg also discussed bitcoins and fraudulent-transfer litigation on a recent ABI podcast.
