Customers of centralised cryptocurrency platforms can lose legal ownership of their digital assets without realising it, leaving them as unsecured creditors when an exchange collapses, according to Roshan Dharia, founder and chief executive of digital-asset restructuring firm Echo Base.
Retail users may assume their tokens remain in accounts under their own control. In practice, platforms often split their operations across offshore companies: one entity manages onboarding and customer agreements, while another affiliate or custodian holds the wallets, private keys and tokens.
Dharia told Bitcoin.com News that bankruptcy rights depend on the wording of the customer contract, not simply on which entity controls the blockchain assets. If the agreement creates a custody or trust arrangement, customers may retain legal title and the platform acts as a bailee. But if ownership is transferred to the company, users are left with contractual claims against an operating business that may hold little or no property.
“Celsius showed how much turns on the paperwork,” Dharia said. “Custody accounts were largely returned, while Earn balances under the same brand became estate property. The drafting is often vague enough that nobody can say for certain until a court rules. Until then, control decides the first months of any failure, because whoever can sign transactions sets the timetable while everyone else argues about title.”
Customers may also be structurally subordinated if the asset-holding company owes them no direct contractual duty. Their claim could instead be against an operating company, with recovery depending on an intercompany receivable that might be disputed or offset.
Echo Base recently organised an ad hoc committee for users affected by Bitmart’s operational wind-down. It brought in legal counsel and asset-tracing specialists after a $10 million rescue proposal received no response.
When withdrawals are frozen, recovery teams pursue both proprietary claims for the return of specific tokens and contractual claims for debts owed between related companies. Property claims are preferred, but swift action is required before assets are moved or mixed with other funds.
“The primary levers are the same in most platform freezes, and they all aim to take control away from management before the assets move,” Dharia said. He identified creditor petitions seeking provisional liquidators as the strongest option, while offshore common-law courts can grant such orders at short notice where assets risk being dissipated.
Lawyers may also seek freezing orders over wallets and exchanges, use disclosure orders to trace funds, and make U.S. Chapter 15 bankruptcy filings to limit cross-border transfers. To challenge the separation between companies, they must show it was a sham, potentially through shared bank signatories, unified treasury operations, undocumented transfers or marketing that failed to identify the asset-holding entity.
Omnibus wallets create another difficulty by pooling thousands of customers’ funds at shared blockchain addresses. If internal records do not match on-chain balances, linking particular tokens to individual users may be impossible, leaving them to share proportionally in the remaining assets.
Unsecured claims are generally valued in U.S. dollars on the bankruptcy petition date, so holders may not benefit if cryptocurrency prices rise later. A successful proprietary claim could instead return tokens in kind, including any appreciation.
Dharia also warned that proof-of-reserves displays can mislead without an independently audited comparison with total liabilities. In his view, customers should have segregated accounts with a regulated custodian, daily reconciliation and clear contractual ownershipconditions he said few offshore platforms currently provide.
