Case Study
Distressed Cryptocurrency Exchange Selects FTI Consulting for Bankruptcy and Restructuring Services
When the cryptocurrency markets declined suddenly, a cryptocurrency platform providing mobile app-based brokerage, custody and lending services faced serious hardship. The company engaged FTI Consulting’s experts in corporate restructuring and cryptocurrency and digital assets to provide in-depth technical due diligence and strategic recovery advice.
Situation
After a series of financial events and decisions, the client, a high-profile provider in the cryptocurrency industry, ultimately filed for chapter 11 bankruptcy. FTI Consulting’s industry-leading reputation in corporate restructuring work placed the firm high on the shortlist of financial advisor candidates. Due to the complexity of technologies associated with tracing digital assets, the client required the support of blockchain technology and digital assets experts who could provide a detailed map to all assets and understand the nuances of the underlying technology.
Our Role
FTI Consulting’s Corporate Finance segment and experts from within the Technology segment’s Blockchain & Digital Assets practice were engaged to provide critical advisory and technical due diligence work. The team provided support including:
- Analysis and insight into the validity of the company’s processes, and strategic options regarding their positions and practices.
- Technical due diligence through digital asset tracing, industry insight and expertise to determine the plausibility and merits of organizations making bids for the company and/or its assets.
- Evaluation and feedback on the client’s standalone restructuring plan, their staking plans while in bankruptcy and a sale process for potential buyers of the company or its assets.
- Technical due diligence of wallet security, protocols, processes, counterparty risks and the validity of processes for borrowing, lending and staking digital assets.
- Technical examination of the potential buyers of the company or its assets.
Our Impact
In this ongoing project, FTI Consulting has provided the clients with numerous results to date. The team has supported the client in unraveling the debtors’ cryptocurrency staking positions, including comingled customer and debtor funds. Additional outcomes include:
Submitted written testimony objecting to debtor’s staffing plan and KERP, which resulted in an offer made by debtors to reduce the KERP and cut an additional $4M in annual costs.
Validated all crypto assets held by debtors.
Negotiated approval authority over all future staking proposals by debtor.
Our Impact
In this ongoing project, FTI Consulting has provided the clients with numerous results to date. The team has supported the client in unraveling the debtors’ cryptocurrency staking positions, including comingled customer and debtor funds. Additional outcomes include:
Submitted written testimony objecting to debtor’s staffing plan and KERP, which resulted in an offer made by debtors to reduce the KERP and cut an additional $4M in annual costs.
Validated all crypto assets held by debtors.
Negotiated approval authority over all future staking proposals by debtor.