Crypto Collapses Force Bankruptcy Judges to Act Like Regulators

Bankruptcy judges who oversaw the failure of cryptocurrency exchanges this year trumped regulators, outpaced prosecutors, and answered core questions about the legalities of digital currency.

The judges’ decisions could define the crypto industry for years to come, despite leaving thousands of customers without control of assets they thought they owned. The use of bankruptcy to help resurrect the crypto industry comes at a time when Chapter 11 is being used to address a wide range of societal ills, from the opioid crisis to asbestos exposure.

FTX Group, Celsius Network LLC, BlockFi Inc., and Voyager Digital Holdings, among others, filed ...