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Law Journal Newsletters: What Can We Learn from the FTX Bankruptcy?December 01, 2022
Partners at international law firm O’Melveny & Myers LLP predict that the sudden crash of FTX will have ripple effects across the financial regulatory and bankruptcy landscapes in the United States. “Regulators will be emboldened by what happened to FTX,” said William Pao, head of O’Melveny’s Fintech Group. “After all, the crypto industry has lost two-thirds of its value. Consumers and investors are hurting. Very few people will be in position to push back. Be prepared for some very aggressive tactics.” Daniel Shamah, co-head of O’Melveny’s Bankruptcy Litigation Group, noted that “bankruptcy court is a fishbowl. Every decision FTX made in recent weeks will be highly scrutinized by a litany of players — committees, potentially an examiner or a trustee, other investors — with a range of tools at their disposal. Expect this to be a long, expensive process that will take years to play out.”
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