Crypto’s Bankruptcy Hangover: 4 Fixes Congress Must Make before the Next Boom-and-Bus

Celsius, Voyager, BlockFi, FTX, Genesis—the wreckage from 2022 is still working its way through the courts, and millions of retail customers are learning the hard way that the Bankruptcy Code and UCC were never written for border-less, 24/7 digital assets.

Here are four surgical reforms that would protect consumers and cut litigation drag:

1. Presume privacy. Amend §107 so a customer’s name, email and wallet ID are automatically confidential—no year-long fights over redaction, no public doxxing of victims.

2. Shield small withdrawals. Add a §546(f) safe harbor: withdrawals ≤ $50K made within 90 days of filing cannot be clawed back. Thousands of nuisance suits vanish; plans confirm faster.

3. Codify digital-asset property rights. New §5XX + UCC Art 12 tie-in: customer-segregated wallets are not estate property unless title is expressly transferred. “Control” of a Controllable Electronic Record sets perfection & priority—full stop.

4. Make KYC sane in bankruptcy. Let courts appoint distribution agents who can rely on petition-date KYC/AML (plus any extra checks the court wants) and give them a safe harbor from BSA/AML & OFAC fines for good-faith compliance. Why now? The next “innovative” platform will go from unicorn to Chapter 11 faster—and with bigger numbers—than the last. These four tweaks are narrow, bipartisan and do not require a full rewrite of Title 11. Let’s fix the roof while the rain is still falling.

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