Cryptopia obtains chapter 15 recognition of New Zealand liquidation proceedings
Davis Polk advised the foreign representative of Cryptopia Limited in obtaining recognition under Chapter 15 of the United States Bankruptcy Code of Cryptopia’s liquidation proceedings in New Zealand. On May 24, 2019, the foreign representative filed a petition for recognition in the United States Bankruptcy Court for the Southern District of New York. Together with its petition, Cryptopia sought emergency relief, including the application of the automatic stay within the territorial jurisdiction of the United States. In particular, Cryptopia required emergency relief to prevent a contract counterparty in the United States from terminating a contract and potentially deleting critical data hosted on its servers which, if lost, would have imperiled the administration of Cryptopia’s liquidation. At an emergency hearing on May 24, 2019, Judge Martin Glenn granted the requested relief through June 7, 2019. Subsequently, on June 24, 2019, Judge Stuart M. Bernstein issued an order granting recognition of the foreign proceeding, allowing the foreign representative to avail itself of the powers of United States courts.
Cryptopia, a company registered in New Zealand, operated a digital exchange that allowed its approximately two million users to trade digital assets, including Bitcoin and Ethereum. Cryptopia was placed into liquidation in New Zealand on May 14, 2019. The liquidators are focused on collecting and distributing the Cryptopia’s property to the entitled parties.
The Davis Polk restructuring team includes partners Timothy Graulich and Angela M. Libby and associates Stephen D. Piraino and Zachary Levine. The litigation team includes partner James I. McClammy and associates Trent Thompson, James Paulson and Erika Vignoli. Counsel Zachary J. Zweihorn provided law advice on issues related to digital assets. Members of the Davis Polk team are based in the New York and Washington DC offices.