by Sidney P. Levinson, Elie J. Worenklein, Alison Hashmall, Caroline Swett, Lily D. Vo, and Justice H. Walters
Recent turmoil in the cryptocurrency market has brought issues related to crypto-asset custody to the forefront of the crypto currency discourse;[1] in an enormous $1 trillion crypto-asset crash between approximately May 6, 2022 and May 16, 2022, some coins lost up to 99% of their original value.[2] Many crypto-asset investors are now wondering how their assets may be treated if their crypto-asset exchange of choice were to file for bankruptcy.[3] While this question remains largely unanswered, new guidelines issued on April 11, 2022 by the U.S. Securities Exchange Commission (SEC) regarding platforms that safeguard or hold crypto-assets on behalf of users may require additional disclosures on this topic.