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July 21, 2025
Cadwalader partner Douglas S. Mintz was quoted in a Bloomberg Law article discussing the GENIUS Act (S. 1582), signed into law on July 18, which allows stablecoin holders to be repaid before other creditors in bankruptcy if reserves fall short.
Doug called the priority scheme created by the act “very unusual” and said it is “not how the bankruptcy code currently works generally.”
The article notes that the law treats stablecoin reserves as customer property rather than part of the estate, and grants holders a repayment priority that comes ahead of lawyers, financial advisers, unpaid employees, tax authorities, and the Justice Department’s bankruptcy monitoring unit. Restructuring professionals expressed concern that the change could lead to administrative insolvency for issuers and deter financing.
Read the full article here (subscription required).
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