Calibrating Resolution Regimes for Traditional Financial Institutions and Crypto
2 Pages Posted: 30 Sep 2022 Last revised: 15 Nov 2022
Date Written: July 21, 2022
Many key policy issues loom regarding the resolution of a failed crypto company: identification of the primary regulator, the applicable customer protection regime, what is the applicable resolution regime, who will be the receiver in insolvency, whether funding is available, the applicability of an automatic stay to short-term liabilities, and the order of claims. This last issue, the order of claims, is especially critical if a decentralized finance protocol pre-specifies the treatment of assets in a resolution process in a way that differs from the traditional order of claims. A related issue is whether voidable transfer provisions will then apply.
Keywords: crypto, cbdc, blockchain, web3, financial regulation, digital assets
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