INSOL International News Update

In its simplest form, a cryptocurrency is a virtual fiat currency which uses encryption to verify the identity of the individuals conducting transactions denominated in that currency. Payments using cryptocurrencies generally take place on a peer-to-peer basis without the need for intermediaries such as payment processors or systems, thus offering increased speed and lower transaction costs.

Authors: Claude Brown

Bitcoin, arguably the only cryptocurrency so far to have become a household name, was launched in 2009 and has amassed a sizeable user base and made headlines all over the world. Since then, numerous new cryptocurrencies have been brought to market, many of which have recently surged in value, causing concerns among financial commentators of a “cryptocurrency bubble”.

This article considers some of the issues that an insolvency professional might face if appointed to a company whose assets are held in cryptocurrencies and looks at some of the overarching insolvency issues arising from the use of a payment infrastructure employing cryptocurrencies and distributed ledger technologies.

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