Cryptocurrency trading firms Celsius and Voyager Digital crashed earlier this month, trapping clients' funds within their platforms. Voyager’s financials are unknown, but Celsius has $167M in cash on hand to repay over $4.7B in customer deposits.

Why should we care?
How regulators respond to these platforms’ bankruptcies may determine the future of crypto. If, on the one hand, the platforms’ owners are given a free pass and clients fail to recover their funds, then other crypto platforms may replicate Celsius and Voyager’s business models without hedging against crypto’s wild volatility. That lack of accountability would no doubt fuel an anti-crypto movement among Celsius and Voyager’s former client bases, meaning, among other things, that the supply of crypto services could wildly exceed demand. If the companies receive a bailout, meanwhile, both crypto-service producers and consumers could advocate for the status quo to continue. In addition to collateralizing deposits—which should have been done in the first place—surviving crypto platforms could also consider lobbying for government support in the form of something resembling FDIC insurance. Crypto boosters may think they hold the currency of the future, but overcoming crypto’s volatility as a storage of value requires use of old-school, state-supported solutions.