The Cryptic Case of Cryptocurrency Security Interests: Have You Properly Perfected Your Interest In Cryptocurrency And Blockchain-Based Assets?

Blockchain, News, Opinion, Regulation | October 9, 2019 By:

As cryptocurrency, tokens and other blockchain-based assets, including so-called smart contracts (“Digital Assets”), begin to represent more substantial value on corporate balance sheets, lenders will inevitably begin to see these assets pledged as collateral to secure debt investments. Like other assets pledged as collateral, secured lenders will want a properly perfected security interest in any Digital Asset collateral so that (1) such Digital Asset may be foreclosed on or sold upon a default of the debtor without seeking judicial remedies and (2) the lender has priority with respect to the Digital Assets over the claims of unperfected and unsecured creditors.  Read more  »