PhD thesis defence by Theodora Kostoula.
The recent wave of high-profile crypto collapses during the so-called ‘crypto winter’ has exposed the fragility of crypto-markets and the challenges posed by the underlying distributed ledger technology (DLT). While features such as decentralisation, automation, immutability, and (pseudo-)anonymity underpin DLT’s appeal across different sectors, they also raise complex legal issues. Challenges are particularly pronounced in insolvency law, where the value and resilience of DLT-based assets, intermediaries, and networks are put to the test.
This thesis explores the interaction between DLT and EU insolvency law as its main research question, assessing how the EU does or should address it. Drawing on doctrinal, law in context, and comparative approaches, it examines both the impact of insolvency law on DLT and the potential of DLT to facilitate insolvency proceedings. In particular, it analyses how EU insolvency rules apply – often imperfectly – to new types of debtors and (crypto-)assets, smart contracts, DAOs, and DeFi structures. Core issues concern crypto-assets inclusion in the insolvency estate, creditor rights, tracing and recovery, valuation and realisation in volatile, immutable, and pseudonymous environments. The analysis demonstrates that the current EU insolvency law framework inadequately addresses these complexities, resulting in legal uncertainty and frag-mented outcomes. The thesis further explores DLT’s potential to enhance insolvency proceedings, improving cross-border communication and cooperation, automating procedural actions and facilitating asset realisation.
The thesis identifies priority areas for reform and advances recommendations for legislative interventions to harmonise and streamline insolvency processes across Member States. Overall, it argues that DLT presents not only a challenge but also an opportunity: it can drive substantive harmonisation and strengthen EU insolvency law in the digital era.
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