Patrick Daugherty Discusses Legal Debate Over Celsius’ DeFi Paydowns

Foley & Lardner LLP Partner Patrick Daugherty was quoted in the Bloomberg article, “Celsius Paydowns Take Crypto Lender Into ‘Uncharted Territory’,” discussing Celsius’ repayments of over $900 million in debts to decentralized-finance (DeFi) platforms. The paydowns have ignited a legal debate on how and in what order distressed crypto companies should pay back creditors.  

Patrick noted how the “payments made to the DeFi protocols will be scrutinized” despite DeFi platforms being entitled to priority given their status as secured creditors, compared to customers who are treated as unsecured creditors in this case.