Crypto-Assets And Insolvency: Uncharted Territories In The IBC Framework

Written by: Dhara Verma , B.A.LL.B (4th Year), Lovely Professional University

Abstract

Crypto-assets, the digital currencies that became fashionable along with the blockchain, not only altered the functioning of financial systems but also posed new challenges to insolvency regimes in different countries. India is one such country where because of the legal imbroglio, there is hardly any guidance on dealing with virtual digital assets (VDAs) under the existing 2016 Insolvency and Bankruptcy Code (IBC). What is ironical is that while the law stands confused, the stakeholders are left to fend for themselves in a whirlpool of legalities. This article attempts an exposition of the Indian dilemma via the route of regulatory inadequacies, behaviours of the courts, and best international practices. It emphasizes the urgent need for the IBC to define crypto-assets, which would provide not just legal clarity but also equitable treatment to all affected stakeholders.

Keywords: cryptocurrency insolvency, virtual digital assets, IBC challenges, asset valuation, cross-border insolvency

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Volume 2 | Issue 1