FTX's demise part 4: Bankruptcy experts weigh in on next steps for FTX

Episode 118 of Season 4 of The Scoop was recorded live with The Block's Frank Chaparro, Dan Besikof, a Partner at Loeb & Loeb, and Mark Shapiro, a Partner at Shearman & Sterling.

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In the fourth installment of The Scoop’s continued coverage of FTX's demise, host Frank Chaparro examines the legal underpinnings of FTX’s bankruptcy and restructuring process with Dan Besikof, a partner at the law firm Loeb & Loeb, and Mark Shapiro, Chair of the Financial Restructuring Group and a partner at the law firm of Shearman & Sterling. In 2008, Shapiro served as the Head of Restructuring for Lehman Brothers, where he guided the sale of the firm's U.S. assets in chapter 11.

According to Besikof, FTX’s fiduciary will likely attempt to bring money back into the estate through lawsuits:

“One of the things that they're going to look at is where did money go out where value didn't come back, and to the extent money went out and value didn't come back, that's a natural target for a fraudulent conveyance lawsuit or a fraudulent transfer lawsuit.”

FTX has notified a federal judge it wants BitGo to custody its $740 million worth of digital assets.

While the exact situation of FTX’s finances is still uncertain, Shapiro says the sheer amount of money lost by FTX users is likely to prompt regulators to take a more proactive approach going forward:

“Now that it's become so public and so much money has been lost, I think the paternalistic side of the government is going to take over and try to do something about protecting investors.”

During this episode Chaparro, Besikof and Shapiro also discuss:

  • Why some creditors are more likely to be made whole than others
  • How different jurisdictions are approaching the case
  • What legal precedents the FTX bankruptcy creates

This episode is brought to you by our sponsors Tron, Ledn

About Tron
Founded in 2013, Huobi Global is one of the largest virtual asset exchanges in the world. Huobi Global serves millions of users across international markets. Since its establishment, Huobi Global has committed to providing first class virtual asset investment services. Huobi Global's robust infrastructure, product innovation and capital strength provides a truly customer-centric and secure trading environment to help our international users to achieve their investment objectives. Please refer to Huobi's official website for more information: huobi.com.

About Ledn
Ledn was founded on the unshakeable conviction that digital assets have the power to democratize access to the global economy. We help you to experience the real life benefits of your Bitcoin without having to sell it. Start a savings account, take out a loan, or double your Bitcoin. For more information visit Ledn.io

Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.

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