It was not that long ago that blockchain advocates were proselytizing about a utopian, decentralized financial future. The technology's potential to change the ways industries and services work inspired predictions of its potential to transform society. Investors and advocates looked upon blockchain features—the security of encrypted ledgers, automation based on smart contracts, the resilience of its distributed structure and the data protection of its immutable ledgers—and dreamed on the possibilities.
In its short life since being invented by Satoshi Nakamoto, blockchain technology has been touted as the technological means to end the control of government over commerce via fiat currencies, thereby leading to freedom from oversight, regulation and tax. This was a decidedly libertarian utopia to be sure: We are all happy not because we cooperate, but because we all leave each other alone to prosper from our gifts. However, even by those decidedly non-cooperative terms, the blockchain dream utopia has apparently ended.
In this Law360 article, Loeb & Loeb Litigation partner Christopher Ott examines blockchain businesses, such as Gemini Trust Company LLC, facing a number complications in bankruptcy court, including allegations involving outright fraud.
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