From Crypto Bankruptcies to Crypto IPOs, Big Law Wins

Big Law’s Next Crypto Bonanza Beckons With New Wave of IPOs

Big Law firms are poised to cash in on an emerging wave of initial public offerings by cryptocurrency companies—just as a gushing spigot of legal fees from crypto-related bankruptcies turns off. […]

For Big Law, the crypto-supportive Trump administration represents something of a trade-off: Disputes and restructuring lawyers are giving way to deals teams as crypto companies steer past controversy and toward growth.

It wasn’t long ago that law firms like Sullivan & Cromwell, Kirkland & Ellis, White & Case, Cleary Gottlieb, and Weil Gotshal were racking up tens of millions in fees from crypto’s bankruptcy cases. With more than $750 million in fees from those bankruptcies paid, the fallout from the last crypto winter is largely over. […]

Now, regulators are ready to “pave the way for crypto expansion into the capital markets,” as the US Securities and Exchange Commission’s lone Democratic commissioner, Caroline Crenshaw, said this week.

The law firms leading this next stage of growth are the typical capital markets leaders.

Stablecoins Bring Crypto Closer to the Mainstream. What Could Go Wrong?

Regulators in charge of the safety of the US financial system are watching. A loss of confidence in any asset, whether a bank account or a money market fund, can trigger a run to redeem. That’s true for digital tokens too, say researchers at the Financial Stability Oversight Council. “This run risk is amplified by issues related to both market concentration and market opacity,” researchers wrote at yearend.

Crypto skeptics bring up these warnings as lawmakers duke out the details. Even a small deviation from a $1 price could trigger a problem. “In the race for yield, those reserves will be mismanaged, and there will be runs on stablecoins,” says Corey Frayer, director of investor protection at the Consumer Federation of America and former crypto policy adviser to Biden-era US Securities and Exchange Commission Chair Gary Gensler. “And even though they are private, and even though they don’t pay into the deposit fund, they will be bailed out like any other too-big-to-fail financial institution,” he says.

Public Cos. Must Heed Disclosure Risks Amid Trade Chaos

Public companies need to be cognizant of the SEC’s enforcement landscape with respect to financial reporting and disclosure risks, as well as sanctions and export regulations. The trade war presents multilayered risks regarding a public company’s ability to manage the impact of tariffs and sanctions while providing truthful earnings guidance and protecting its profit margins.

The current SEC will likely scrutinize any public company deemed to be evading U.S. export and controls laws, or manipulating its financial statements, in order to conceal the impact of tariffs or sanctions.

Public companies need to ensure that their accounting practices and internal controls align with their public-facing disclosures, especially their critical accounting policies. When a financial reporting crisis occurs, the SEC will likely scrutinize closely how a public company discloses its accounting practices to investors. It is important to make sure that this road map is consistent — both externally and internally.

Family Office Investments: Private Equity, Crypto Rise in Shift Away from Stocks

Family offices are pursuing private equity investments and looking to add digital assets as their portfolios rely less on stocks, according to a new report.

Among family offices with more than $1 billion under management, two-thirds plan to increase allocations to private equity funds this year, a nearly 70% increase compared to 2024. That comes as public equities account for about 19% of investable assets at these firms, a 28% drop compared to last year, according to the 2025 Investment Insights for Single Family Offices report from BNY Wealth.

The report, conducted at the beginning of the 2025, also found a shift in attitudes toward cryptocurrency, with 74% of the investors surveyed saying they have, or are exploring, putting money into digital assets following the launch of the first Bitcoin ETF and the election of Donald Trump after he embraced crypto during the campaign.

Chanos and Saylor Clash in a Wall Street War of Words

The back and forth between famed short-seller Jim Chanos and Bitcoin billionaire Michael Saylor is becoming a Wall Street battle for the ages.

The two investors have quarreled against one another in separate Bloomberg interviews this week, with Chanos saying that Saylor’s business model is “financial gibberish” and Saylor arguing that Chanos just doesn’t understand it. […]

As Chanos sees it, the “big short” lies in the yawning difference between Strategy’s share price and the value of its Bitcoin holdings. The company’s so-called mNAV — the stock’s premium relative to the value of those crypto holdings — currently stands at about 1.8 times, nearing its historic average, and “it should be 1,” says Chanos. He said he put on the trade and advised clients when the level was between 2.2 and 2.3 times.

“This is akin to saying my house that rose in value from $450,000 to $500,000 last year is not worth $500,000. It’s worth $1.5 million because it is worth $500,000 plus a 20 multiple on the $50,000 increase,” Chanos said. “Of course, that’s absurd. But that is the claim he is making.”

Saylor, in turn, has slammed Chanos’s view. He “is valuing the business that is generating $8.4 billion of shareholder value at zero and he is hoping somehow the equity will trade to NAV,” Saylor said.