In the span of the last two months, a digital piece of art sold for nearly $70 million, Jack Dorsey, CEO of Twitter, sold his first tweet for $2.8 million, and a digital Lebron James basketball card went for $208,000. What do these three massive sales have in common? Each transaction was for a non-fungible token (NFT), and together, they signal rapidly growing interest in the cryptographic asset marketplace.

Starting with the basics, what is a non-fungible token?

An NFT is a type of digital, cryptographic asset which exists on blockchain. Fungibility refers to interchangeability – assets like dollars, gold, and even Bitcoin, are fungible, because each unit is worth the exact same amount, and is thus readily interchangeable. On the other hand, each unit of a non-fungible asset has its own unique value and thus is not readily interchangeable – think of assets like property, artwork, and other collectibles. [1]

Filling a Chapter 7 Bankruptcy petition can be complex, but the attorneys at Savage Villoch Law, PLLC are equipped to ease the burden and guide you through the process with care.

As we’ve previously covered in our chapter 7 bankruptcy blog series, determining chapter 7 eligibility can be complicated in itself, as can properly balancing the benefits and drawbacks unique to your circumstances.  Advice from trusted, experienced legal counsel can help you smoothly navigate these obstacles and ensure you get the relief you deserve as quickly as possible.

Once you have made these crucial pre-filing decisions, Savage Villoch Law can also assist you through the process of filing your Chapter 7 Bankruptcy petition. This petition will be filed in your local bankruptcy court and consists of several Official Bankruptcy Forms which detail information such as your current assets and liabilities, a record of your current income and expenditures, a statement of your financial affairs, and any open contracts or unexpired leases.

Once your Chapter 7 eligibility has been determined, it’s important to consider whether the unique benefits and drawbacks of bankruptcy make filing an optimal path forward for you. Savage Villoch Law can work with you directly to understand your specific circumstances and balance these factors to help determine whether you should file.

First and foremost, Chapter 7 can grant you quick and complete relief from your unsecured debts – it’s the fastest and most common form of bankruptcy, and the vast majority of those who file will get relief. Any of your financial obligations that are not backed by collateral can be discharged – think your credit card debt, medical bills, and personal loans. In a typical Chapter 7 case, these debts will be discharged within three to six months of filing, and your creditors must stop attempting to collect as soon as your petition is filed.

Forcing your creditors to stop calling you is really a two-fold benefit of bankruptcy. First, you can rest easy knowing that collectors won’t be calling you or otherwise bother you while the bankruptcy court is considering your case since collections are paused until the court determines whether you’ll receive Chapter 7 relief.  Second, the quick turnaround for Chapter 7 cases offers you a jump start on rebuilding your financial future, especially when compared with the years-long repayment plans generally used in a Chapter 13 reorganization bankruptcy.

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Chapter 7 bankruptcy can ease some of your financial burdens if you’ve fallen behind on monthly bills, but how do you know if you are eligible to file in the first place?

At a high level, to be eligible under chapter 7 you must be able to show that you do not have the means to pay your monthly expenses and debts given your current income.

Any individual with an income below their state’s median for their household size is automatically eligible to file under chapter 7. However, you may still be eligible even if your income falls above the median, you will just need to pass the chapter 7 means test first.

If you are dealing with debt that has become unmanageable despite your best efforts at repayment, Chapter 7 bankruptcy may be an avenue to consider. Although Chapter 7 bankruptcy comes with its own set of drawbacks to keep in mind, it also has the potential to help you begin rebuilding toward a healthier financial future.

Chapter 7 bankruptcy is often referred to as “liquidation bankruptcy” because it allows individuals to completely discharge some portions of their debt, but only after certain assets have been liquidated. It is both the fastest and most common type of bankruptcy, and often allows debt to be discharged within three to five months of filing. However, before filing, there are some important factors to consider.

First, you should consider your current financial situation to determine eligibility.  When filing for Chapter 7 bankruptcy, a variety of financial documents will be disclosed, including schedules of assets, liabilities, income, and expenditures, transcripts of tax returns, and a list of all owned property, among other information. As with any form of bankruptcy, individuals must also undergo credit counseling and provide a record of completion before filing.[1]

This week’s unprecedented winter storm in Texas this is the latest reminder of intensifying weather events across the globe, and the damage left in its wake opens up important questions about whether our financial systems are prepared to withstand the impacts of climate change. One of the most important functions of regulatory bodies like the SEC is to protect the market from systemic risks, and there is a widening consensus that climate change is one systemic risk for which the SEC must prepare.

As defined by SEC Commissioner Allison Lee during her keynote speech at the PLI’s Annual Institute on Securities Regulation in November 2020, a systemic risk is “characterized by the following features: (1) ‘shock amplification’ or the notion that a given shock to the financial system may be magnified by certain forces and propagate widely throughout; (2) that propagation causes an impairment to all or major parts of the financial system; and (3) that impairment in turn causes spillover affects to the real economy.” [1]

Put more simply, a systemic risk is one with the potential to result in the downturn, or even collapse, of an entire market system. The ongoing COVID-19 pandemic is one recent example of such a risk, as we continue to see its economic impacts across every sector of the market. During her speech, Lee noted that although the SEC is not in a position to regulate and slow the actual drivers of climate change, it can – and should – address climate risks through standardization of the environmental, social, and governance (ESG) disclosures that financial institutions make.

As they begin to move into the mainstream, it has become clear that cryptocurrencies pose a unique set of regulatory and legal challenges for investors and regulation agencies alike. In the past week alone, two high-profile securities fraud cases tied to cryptocurrency have come to light, and the total number of enforcement actions by the SEC on similar schemes has risen sharply over the past five years. In 2016, the SEC filed only one “Digital Assets/Initial Coin Offerings” enforcement action – in 2020, they filed 23.

The first cryptocurrency, Bitcoin, was introduced in 2009, and it has since been joined by over 1,900 competitors. Cryptocurrencies operate in a decentralized, purely digital block-chain network. Within the network, a supply cap on “coins” exists, and coin production is left in the hands of collective members of the system through a process known as “mining.” In Bitcoin’s case, there can only ever be 21 million coins mined, of which over 18 million have been mined thus far. Cryptocurrencies like Bitcoin derive their value largely from their limited supply, overall market demand, the cost to produce a bitcoin via mining, and competition from other cryptocurrencies.

Recently, Bitcoin’s price has been on the rise, stirring up a good deal of interest from prospective investors. As of February 6, 2021, one bitcoin is worth $39,255.90 –up about 300% year over year, and 34% year to date. But an investment in Bitcoin, or other cryptocurrencies like it, is unique in its risks. Experts caution that because cryptocurrency is a relatively new technology, and is not yet well understood by the public, prospective investors are at an increased risk of falling victim to fraudulent schemes.

It has been a tumultuous week in the investment world, with rallies among a gaggle of unlikely stocks, spurred on by a group of even more unlikely investors – retail investors who have banded together on the popular social media site, Reddit.

As has been widely reported this week, when Reddit retail investors discovered that hedge fund managers were widely shorting GameStop, AMC, and others, they urged fellow users to begin buying up these stocks. This frenzy of investment activity resulted in a short squeeze, sending GameStop’s stock price soaring, causing hedge funds to incur huge losses on their short positions, and placing popular online trading platforms in a precarious financial situation.  GameStop shares closed the week of January 25, 2021 up 400% in spite of market volatility and restrictions, and without any material change to the prospects of company.

But how did we get here?

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