Blockchain & Digital Assets

Managing bankruptcies or restructuring for distressed crypto-native companies requires a deep understanding of the unique financial mechanisms in the industry, from staking and lending practices to assessing the technical feasibility and implications to creditors of various bids throughout the auction process. The FTI Consulting team has experience advising distressed crypto exchanges on behalf of unsecured credit councils (“UCCs”) and has conducted evaluations across a range of issues, including counterparty risk assessments, validity of historical transactions and potential clawbacks of pre-filing withdrawals.

Digital asset investigations are as unique as the assets involved in such disputes. These complex investigations can span cryptocurrencies, NFTs, virtual assets, smart contracts, crypto mining operations and DeFi programs with blockchain protocols, staking and yielding programs, custodied assets, and even metaverse environments or entire smart cities in some projects. Each of these areas presents unique considerations requiring technical know-how and deep blockchain expertise to prove or disprove claims.

FTI Consulting’s team of certified blockchain and digital assets experts works alongside our cybersecurity, forensic accounting, digital forensics, economics and strategic communications professionals to bring additional expertise to engagements involving regulatory non-compliance, cybercrime, international fraud schemes, fraud, financial crimes and employee misconduct.

FTI Consulting’s Blockchain & Digital Assets practice has led more than 80 digital asset investigations and testified on more than 20 engagements in the United States and Australia. Top law firms routinely rely on us to present complex information clearly to a multitude of parties, as well as provide expert witness testimony in court. Backed by our Digital Assets Lab, our team can identify and fully track more than 1,500 digital assets across more than 30 blockchains. Building on that knowledge, our specialized team comprises certified Bitcoin experts, blockchain experts, smart contract developers and cryptocurrency investigators who work with legal teams to fully investigate blockchain and cryptocurrency claims.

Professionals in FTI Consulting’s Blockchain & Digital Assets practice have worked on numerous high-profile mergers and acquisitions involving crypto companies and assets. Leveraging our deep technical knowledge, our team can quickly and thoroughly conduct a holistic technical and operational evaluation that includes wallet valuation, custody and management of digital assets, privacy and security protocols and all other areas of pre-transactional due diligence and portfolio valuation. FTI Consulting can also perform sophisticated wallet tracing by analyzing transactional relationships and intelligence to identify entities and personas associated with suspect cryptocurrency wallets.

Blockchain technology has a number of use cases, from streamlining the supply chain to validating data reporting for ESG purposes. Yet many organizations lack a clear understanding of the risks, benefits and strategies for implementing blockchain for optimal return. To help bridge this gap, FTI Consulting provides a variety of blockchain advisory services. This includes digital asset strategies involving NFTs, tokenized assets, cryptocurrencies or stablecoins, as well as strategic metaverse advisory, Web3 guidance and blockchain project design and implementation.

As more regulations are introduced globally, it is important for crypto-native organizations to understand their risk landscape and potential disclosure requirements under these new rules.

Our dedicated team of blockchain and digital assets specialists provides deep technical and operational expertise for our clients, including: virtual asset custody assessments, disclosure readiness assessments, smart contract assessments, validation of custodial holdings and FBO (“for benefit of”) fiat accounts, assessment of bilateral loans, staking and trades with significant or notable counterparty risks. In addition, our team can help clients with on-chain validation of customer deposits or withdrawals, on-chain validation of redemption volumes with comparison to industry peers and asset tracing from known insiders.

Our experts have assisted many cryptocurrency companies with designing and implementing processes to address anti-money laundering, sanctions and fraud detection compliance using our industry expertise and cutting-edge technical capabilities. Our team of data experts, former regulators and former risk and compliance officers regularly consults with leading digital-native companies as an independent and trusted advisor. We have applied our expertise to help crypto-native firms develop their capabilities in market risk, credit risk, model risk management, third-party risk and operational risk management.

As the blockchain becomes more ubiquitous, it is essential to be prepared for unintended consequences like theft and cybersecurity incidents. In 2022 alone, cyber criminals and nation-state actors stole hundreds of millions in cryptocurrency — including from large exchanges, high-profile individuals and the everyday crypto enthusiast — often due to a lack of proper security protections. FTI Consulting’s cybersecurity experts help make security a top priority, from guidance on fundamentals to infrastructure advisory and complex investigations.